On January 1, 2022, the Acts Co. acquired 100% of the Titus Co. when the fair value of Titus net assets was P4,000,000 and their carrying amount was P3,500,000 The consideration transferred comprised P4,400,000 in cash transferred at the acquisition date, plus another P200,000 in cash to be transferred 10 months after (November 1, 2022) the acquisition date if a specified profit target was met by Titus. At the acquisition date, there was only a low probability, around 40%, of the profit target being met. On November 1, 2022, additional P200,000 was paid by Acts to Titus after the latter met the specified profit target.
On January 1, 2022, the Acts Co. acquired 100% of the Titus Co. when the fair value of Titus net assets was P4,000,000 and their carrying amount was P3,500,000 The consideration transferred comprised P4,400,000 in cash transferred at the acquisition date, plus another P200,000 in cash to be transferred 10 months after (November 1, 2022) the acquisition date if a specified profit target was met by Titus. At the acquisition date, there was only a low probability, around 40%, of the profit target being met. On November 1, 2022, additional P200,000 was paid by Acts to Titus after the latter met the specified profit target.
Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion
Section: Chapter Questions
Problem 28CE: LO.7 On October 1, 2019, Priscilla purchased a business. Of the purchase price, 60,000 is allocated...
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