On January 1, 20x1, ABC Co. acquired 75% interest in XYZ, Inc. for P2,500,000 cash. ABC Co. incurred transaction costs of P250,000 for legal, accounting and consultancy fees in negotiating the business combination. ABC Co. elected to measure NCI at the NCI's proportionate share in XYZ, Inc.'s identifiable net assets. The carrying amounts and fair values of XYZ's assets and liabilities at the acquisition date were as follows: Assets Carrying amounts Fair values 25,000 300,000 875,000 Cash in bank 25,000 Accounts receivable 425,000 1,300,000 Inventory Equipment - net Goodwill 2,500,000 2,750,000 250,000 50,000 4,500,000 4,000,000 Total assets Liabilities Payables 1,000,000 1,000,000 How much is the goodwill (gain on a bargain purchase)?

On January 1, 20x1, ABC Co. acquired 75% interest in XYZ, Inc. for P2,500,000 cash. ABC Co. incurred transaction costs of P250,000 for legal, accounting and consultancy fees in negotiating the business combination. ABC Co. elected to measure NCI at the NCI's proportionate share in XYZ, Inc.'s identifiable net assets. The carrying amounts and fair values of XYZ's assets and liabilities at the acquisition date were as follows: Assets Carrying amounts Fair values 25,000 300,000 875,000 Cash in bank 25,000 Accounts receivable 425,000 1,300,000 Inventory Equipment - net Goodwill 2,500,000 2,750,000 250,000 50,000 4,500,000 4,000,000 Total assets Liabilities Payables 1,000,000 1,000,000 How much is the goodwill (gain on a bargain purchase)?

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter7: Corporations: Reorganizations

Section: Chapter Questions

Problem 21P

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