On January 2, 20x1, Paul Corp. acquired 20% ownership interest in Simon Corp. for P1,350,000 and the carries the investment using the cost model. On December 31, 20x1, Simon Corp. declared and paid dividends amounting to P500,000 and the net income was P2,000,000. On January 10, 20x2, Paul Corp. acquired another 50% ownership interest in Simon Corp for P3,000,000. At that date, Simon Corp. has identifiable assets with book value of P6,000,000 and fair value of P7,200,000 and it has liabilities with book and fair value of P1,500,000. Assuming Paul Corp. measures the NCI at fair value amounting to P2,250,000, what is the amount of goodwill? 600,000 750,000 300,000 210,000
On January 2, 20x1, Paul Corp. acquired 20% ownership interest in Simon Corp. for P1,350,000 and the carries the investment using the cost model. On December 31, 20x1, Simon Corp. declared and paid dividends amounting to P500,000 and the net income was P2,000,000. On January 10, 20x2, Paul Corp. acquired another 50% ownership interest in Simon Corp for P3,000,000. At that date, Simon Corp. has identifiable assets with book value of P6,000,000 and fair value of P7,200,000 and it has liabilities with book and fair value of P1,500,000. Assuming Paul Corp. measures the NCI at fair value amounting to P2,250,000, what is the amount of goodwill? 600,000 750,000 300,000 210,000
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 25E
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Question
On January 2, 20x1, Paul Corp. acquired 20% ownership interest in Simon Corp. for
P1,350,000 and the carries the investment using the cost model. On December 31, 20x1,
Simon Corp. declared and paid dividends amounting to P500,000 and the net income was
P2,000,000.
On January 10, 20x2, Paul Corp. acquired another 50% ownership interest in Simon Corp for
P3,000,000. At that date, Simon Corp. has identifiable assets with book value of P6,000,000
and fair value of P7,200,000 and it has liabilities with book and fair value of P1,500,000.
Assuming Paul Corp. measures the NCI at fair value amounting to P2,250,000, what is the
amount of
600,000
750,000
300,000
210,000
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