On December 31, 2021, Sleepy Corporation purchased for P40,000,000 cash all of the outstanding ordinary shares of another entity when the subsidiary's statement of financial position showed net assets of P32,000,000. The subsidiary's assets and liabilities had fair value different from the carrying amount as follows: Property, plant and equipment, net Other assets Carrying amount 50,000,000 5,000,000 Fair value 57,500,000 Long-term debt 30,000,000 28,000,000 What amount should be reported as goodwill in the December 31, 2021 consolidated statement of financial position of the acquirer and its wholly-owned subsidiary?
On December 31, 2021, Sleepy Corporation purchased for P40,000,000 cash all of the outstanding ordinary shares of another entity when the subsidiary's statement of financial position showed net assets of P32,000,000. The subsidiary's assets and liabilities had fair value different from the carrying amount as follows: Property, plant and equipment, net Other assets Carrying amount 50,000,000 5,000,000 Fair value 57,500,000 Long-term debt 30,000,000 28,000,000 What amount should be reported as goodwill in the December 31, 2021 consolidated statement of financial position of the acquirer and its wholly-owned subsidiary?
Chapter6: Corporations: Redemptions And Liquidations
Section: Chapter Questions
Problem 63P
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Transcribed Image Text:On December 31, 2021, Sleepy Corporation purchased for P40,000,000 cash all of the outstanding
ordinary shares of another entity when the subsidiary's statement of financial position showed net assets
of P32,000,000. The subsidiary's assets and liabilities had fair value different from the carrying amount
as follows:
Carrying amount
50,000,000
5,000,000
30,000,000
Fair value
Property, plant and equipment, net
Other assets
57,500,000
Long-term debt
28,000,000
What amount should be reported as goodwill in the December 31, 2021 consolidated statement of
financial position of the acquirer and its wholly-owned subsidiary?
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