Parent Company acquired 15% of Subsidiary Company’s common stock for P500,000 cash and carried the investment using the cost method. A few months later, Parent purchased another 60% of Subsidiary’s stock for P2,160,000. At that date, Subsidiary had identifiable assets of P3,900,000 and a fair value of P5,100,000, and had liabilities with a book value and fair value of P1,900,000. The fair value of the 25% non-controlling interest is P900,000. The amount of goodwill to be recognized resulting from this combination:

Parent Company acquired 15% of Subsidiary Company’s common stock for P500,000 cash and carried the investment using the cost method. A few months later, Parent purchased another 60% of Subsidiary’s stock for P2,160,000. At that date, Subsidiary had identifiable assets of P3,900,000 and a fair value of P5,100,000, and had liabilities with a book value and fair value of P1,900,000. The fair value of the 25% non-controlling interest is P900,000. The amount of goodwill to be recognized resulting from this combination:

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 38P

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Parent Company acquired 15% of Subsidiary Company’s common stock for P500,000 cash and carried the investment using the cost method. A few months later, Parent purchased another 60% of Subsidiary’s stock for P2,160,000. At that date, Subsidiary had identifiable assets of P3,900,000 and a fair value of P5,100,000, and had liabilities with a book value and fair value of P1,900,000. The fair value of the 25% non-controlling interest is P900,000.The amount of goodwill to be recognized resulting from this combination: A. 400,000 B. 84,000 C. 100,000 D. 300,000
Senpai Company acquires 15% of Kohai Company’s common stock for P600,000 cash and carries the investment using the cost model. A few months later, Senpai purchases another 60% of Kohai Company’s stock for P2,592,000. At that date, Kohai Company reports identifiable assets with a book value of P4,680,000 and a fair value of P6,120,000, and it has liabilities with a book value and fair value of P2,280,000. The fair value of the 25% non-controlling interest in Kohai Company is P1,080,000. Compute the amount of goodwill, using full-goodwill or fair value basis approach.
Senpai Company acquires 15% of Kohai Company’s common stock for P600,000 cash and carries the investment using the cost model. A few months later, Senpai purchases another 60% of Kohai Company’s stock for P2,592,000. At that date, Kohai Company reports identifiable assets with a book value of P4,680,000 and a fair value of P6,120,000, and it has liabilities with a book value and fair value of P2,280,000. The fair value of the 25% non-controlling interest in Kohai Company is P1,080,000. Compute the amount of goodwill, using full-goodwill or fair value basis approach: Group of answer choices None of the given P360,000 None P480,000
Senpai Company acquires 15% of Kohai Company’s common stock for P600,000 cash and carries the investment using the cost model. A few months later, Senpai purchases another 60% of Kohai Company’s stock for P2,592,000. At that date, Kohai Company reports identifiable assets with a book value of P4,680,000 and a fair value of P6,120,000, and it has liabilities with a book value and fair value of P2,280,000. The fair value of the 25% non-controlling interest in Kohai Company is P1,080,000. Compute the amount of goodwill, using full-goodwill or fair value basis approach: a. 480,000 b. 360,000 c. None of the given d. None
Senpai Company acquires 15% of Kohai Company’s common stock for P600,000 cash and carries the investment using the cost model. A few months later, Senpai purchases another 60% of Kohai Company’s stock for P2,592,000. At that date, Kohai Company reports identifiable assets with a book value of P4,680,000 and a fair value of P6,120,000, and it has liabilities with a book value and fair value of P2,280,000. The fair value of the 25% non-controlling interest in Kohai Company is P1,080,000. Compute for the amount of goodwill, using partial goodwill or proportionate basis approach: a. None b. 480,000 c. None of the given d. 360,000
At the beginning of current year, Cynosure Company purchased 30% of the ordinary shares of another entity for P3,500,000 when the net assets acquired amounted to P7,000,000 At acquisition date, the carrying amounts of the identifiable assets and liabilities of the investee were equal to their fair value, except for equipment for which the fair value was P1,500,000 greater than carrying amount and inventory whose fair value was P500,000 greater than cost. The equipment has a remaining life of 4 years and the inventory was all sold during the current year. The investee reported net income of P4,000,000 and paid P1,000,000 dividends during the current year. Required: 1. Prepare journal entries for the current year. 2. Compute the investment income for the current year.
At the beginning of current year, Cinnamon Company purchased 40% of the ordinary shares of another entity for P3,000,000 when the net assets acquired amounted to P6,000,000.At acquisition date, the carrying amounts of the identifiable assets and liabilities of the investee were equal to their fair value, except for the equipment for which the fair value was P1,500,000 greater than carrying amount and inventory whose fair value was P500,000 greater than cost.The equipment has a remaining life of 4 years and the inventory was all sold during the current year.The investee reported net income of P4,000,000 and paid P1,000,000 dividends during the current year.Required;1. Prepare journal entries for the current year2. compute the investment income for the current year.
On January 1, Patterson Corporation acquired 80 percent of the 100,000 outstanding voting shares of Soriano, Inc., in exchange for $31.25 per share cash. The remaining 20 percent of Soriano’s shares continued to trade for $30 both before and after Patterson’s acquisition.At January 1, Soriano’s book and fair values were as follows:In addition, Patterson assigned a $600,000 value to certain unpatented technologies recently developed by Soriano. These technologies were estimated to have a three-year remaining life.During the year, Soriano declared a $30,000 dividend for its shareholders. The companies reported the following revenues and expenses from their separate operations for the year ending December 31.a. What amount should Patterson recognize as the total value of the acquisition in its January 1 consolidated balance sheet?b. What valuation principle should Patterson use to report each of Soriano’s identifiable assets and liabilities in its January 1 consolidated balance sheet?c.…
TRICKY Company acquires 25% of JOKER Corporations ordinary shards for P190,000 cash and carries the investment using the cost method. After one quarter, TRICKY Company purchases another 60% of JOKER Corporation's ordinary shares for P540,000. On this data, JOKER Corporation reports identifiable net assets with carrying value of P720,000 and fair value of P920,000. The liabilities of JOKER Corporation has a book value and fair value of 280,000. The fair value of the 15% controlling interest is P125,000. How much is the goodwill or gain on acquisition? A. P250,000 goodwill B. P17,000 goodwill C. P250,000 gain on acquisition D. P17,000 gain on acquisition
P Company acquires 15% of Subsidiary Company’s ordinary shares for P500,000 cash and carries the investment using the equity method. A few months later, P Company purchases another 60% of Subsidiary’s ordinary shares for P2,160,000. At that date, Subsidiary Company reports identifiable assets with a book value of P3,900,000 and a fair value of P5,100,000, and it has liabilities with a book value and fair value of P1,900,000. Determine the GOODWILL arising from the consolidation if The fair value of the 25% non controlling interest in Subsidiary Company is P890,000.
P Company acquires 15% of Subsidiary Company’s ordinary shares for P500,000 cash and carries the investment using the equity method. A few months later, P Company purchases another 60% of Subsidiary’s ordinary shares for P2,160,000. At that date, Subsidiary Company reports identifiable assets with a book value of P3,900,000 and a fair value of P5,100,000, and it has liabilities with a book value and fair value of P1,900,000. Determine the GOODWILL arising from the consolidation if it is to be computed using the full fair value basis of “Full/Gross-up” Goodwill.
P Company acquires 15% of Subsidiary Company’s ordinary shares for P500,000 cash and carries the investment using the equity method. A few months later, P Company purchases another 60% of Subsidiary’s ordinary shares for P2,160,000. At that date, Subsidiary Company reports identifiable assets with a book value of P3,900,000 and a fair value of P5,100,000, and it has liabilities with a book value and fair value of P1,900,000. Determine the GOODWILL arising from the consolidation if The fair value of the 25% non controlling interest in Subsidiary Company is P890,000. answer quickly