Parent Company acquires 75% of Subsidiary Company’s ordinary shares for P225,000 cash. At that date, the shares of Subsidiary are currently selling at P41/share. Subsidiary has a total of 8,000 shares outstanding. Also on that date, Subsidiary reports identifiable assets with a book value of P400,000 and a fair value of P510,000, and it has liabilities with a book value and fair value of P190,000.10. What is the goodwill or (income) from acquisition arising from the consolidation if the non-controlling interest is to be stated at fair value?
Q: Parent Corporation acquired 80% of the outstanding shares of Subsidiary Company on June 1, 2021 for…
A: Non Controlling Interest - It is an ownership of shareholders who owns the less than 50% of…
Q: Parent Corporation issued on March 31, 2021 500,000 shares of its P10 par ordinary shares, P40…
A: Calculation of Consideration paid: a Number of shares outstanding of A Company 220,000.00…
Q: ush and by issuing its own shares with a fair value of P1,350,000. Parent acquired si hs, Parent…
A: The goodwill or gain on bargain purchase refers to the excess or short amount paid for the…
Q: On January 1, 2018, Parent Company purchased 80% of the outstanding shares of Subsidiary Company for…
A: On Acquisition identified assets & liabilities are recorded in the books of the parent company…
Q: Pauline Company issued 240,000 shares of P10 par common stock with a fair value of P5,100,000 for…
A: ACIP is the excess of par value over the actual cost of stock to the shareholders.
Q: YSL Corporation acquired 80% of the outstanding ordinary shares of GBX Company on June 1, 2022 for…
A: Non-controlling interest is the part of net assets and ownership that is not in the hands of…
Q: Acquirer Company purchased the net asset of Acquiree Company by paying cash of P800,000 and issuing…
A: Particulars Amount Amount Fair value of the consideration given up Cash $800,000…
Q: XYZ Company merged into UUU Company on July 1, 2021. In exchange for the net assets at fair market…
A: Printing Cost of Stock Certificates = Printing Cost of Stock Certificates of XYZ Company + Printing…
Q: Pure Corporation acquired an 80% interest in Sincere Company on January 2, 20x6 for P2, 520,000. On…
A: Non Controlling interest will be enthusiasm for an organization whereby the organization claims…
Q: Parent Company has a 90% controlling interest in Subsidiary Company. On December 31, 20x8, the…
A: The dispose of shares owned by the holding corporation reduces its controlling power over the…
Q: On January 1, 2018, Parent Company purchased 80% of the outstanding shares of Subsidiary Company for…
A: The investment of one company in the other company for a share of less than 50percentage is called…
Q: On January 1, 2018, Parent Company purchased 80% of the outstanding shares of Subsidiary Company for…
A: Non-controlling interest refers to those shareholders that hold less than 50% of the shareholding of…
Q: Parent corporation issued on March 31, 2021 500,000 shares of its P10 par ordinary shares, P40…
A: >Goodwill is an intangible assets. >It is generally recorded when it is 'purchased'.…
Q: Parent Company purchases 80% of the outstanding shares of Subsidiary Company for P9,000,000. The…
A: Goodwill: It is an intangible asset. It is the value of the company over the value of all assets…
Q: ABC Company paid P2,000,000 for a 70% interest in XYZ Co. on January 1, 2022. ABC Company elected to…
A:
Q: Parent Company purchased 90% of the outstanding shares of Subsidiary Company paying P975,000. At…
A: This question deals with the concept of business combination which covered in the IFRS 3 "Business…
Q: On January 1, 2018, Parent Company purchased 80% of the outstanding shares of Subsidiary Company for…
A: When one company acquires another company the former is known as the Holding or parent company and…
Q: Parent Company’s shareholders’ equity as of December 31, 2019 is P2,030,000. On January 1, 2020,…
A: The consolidated total equity of parent company is calculated by accumulating all the equities,…
Q: Requirements: 1. How much is the goodwill (gain on bargain purchase) to be reported in the 2022…
A: Goodwill in consolidation = Cost paid by Parent for investment in subsidiary - Parent's share in…
Q: Parent Company issued 50,000 shares of P100 par ordinary share for all outstanding shares of…
A: It is pertinent to note that acquisition costs under business combination need to be expensed…
Q: arent Corporation issued on March 31, 2021 500,000 shares of its P10 par ordinary shares, P40 market…
A: Purchase consideration paid to subsidiary A = Number of shares issued by parent x Fair market value…
Q: Parent Company acquires 15% of Subsidiary Company's ordinary shares for P500,000 cash and carries…
A: Non-Controlling interest- When a company purchases the business of other entity/company partly or…
Q: 21. Parent company acquired 15% of subsidiary company's common stock for 500,000 cash and carried…
A: Consolidation statement:- When one company takes over another company's share by paying purchase…
Q: On January 1, 20x6, Parent Corporation purchased 80% of Subsidiary Company's outstanding stock for…
A: Consolidated financial statement is the financial statement prepared by the parent company which…
Q: rchases 80% of the outstanding shares of S Company for P9,000,000. The carrying value of S Company's…
A: Goodwill is the additional cost incurred by the parent company to acquire the shares of subsidiary…
Q: Subsidiary Company was merged with Parent Corporation on December 31, 2021. In the business…
A: Retained earnings immediately after the combination is P4,035,000. Explanation:
Q: PPP Corporation issued ordinary share capital with a par value of P675,000 and a market value of…
A: Business Combination:-It is happening when one company takes over the business of another business…
Q: XYZ Company merged into UUU Company on July 1, 2021. In exchange for the net assets at fair market…
A: Given information that, XYZ Company is merged into UUU Company on July 1, 2021. There are some out…
Q: Pauline Company issued 240,000 shares of P10 par common stock with a fair value of P5,100,000 for…
A: A business combination occurs in the case of merger and acquisition.
Q: erged into UUU Company on July 1, 2021. In exchange for the net assets at fair market value of XYZ…
A: Given: The fair market value of XYZ Company amounting to P696,450, UUU, issued 68,000 ordinary…
Q: XYZ Company merged into UUU Company on July 1, 2021. In exchange for the net assets at fair market…
A: In a business combination, the acquisition-related cost is recognized in the profit and loss account…
Q: Papa Ltd. acquires 80% shares of Child Ltd. for $90,000 with control. The fair value of Child's net…
A: Consolidated Financial Statements: Asset, liabilities, equity, income, expenses and cash flows of a…
Q: On January 1, 2018, Parent Company purchased 80% of the outstanding shares of Subsidiary Company for…
A: Non-controlling interest is the amount attributable to the shareholders of the subsidiary company…
Q: What is the amount of consolidated equity at the end of the year? (Round off answers to 2 decimal…
A: amount of consolidated equity at the end of the year= P1,647,419.6
Q: Parlor Company acquires 75% of Saloon Company's common stock for P225,000 cash. At that date, the…
A: Goodwill on Acquisition: This type of asset appears when a buyer buys a firm already in existence.…
Q: On January 1, 2018, Parent Company purchased 80% of the outstanding shares of Subsidiary Company for…
A: NCI stands Non- Controlling interest which is defined as the situation which happen when the firm…
Q: Parent Company acquires 15% of Subsidiary Company’s ordinary shares for P500,000 cash and carries…
A: Value of Goodwill under full Goodwill method : = (fair value of controlling interest + non…
Q: ged into UUU Company on July 1, 2021. In exchange for the net assets at fair market value of XYZ…
A: Out of Pocket which are not specifically related to Issue of Shares against the fair value of net…
Q: Company acquires 75 percent of Saloon Company's common stock for P225,000 cash. At that date, the…
A: In case of proportionate method the Non controlling interest will be measured at their % of share of…
Q: PARENT Corporation acquired 80% of the outstanding shares of SUBSIDIARY Company on June 1, 2022 for…
A: The net assets of a subsidiary company is the valuation of all the equity adjusted for the fair…
Q: Parent Company acquires 15% of Subsidiary Company’s ordinary shares for P500,000 cash and carries…
A: Goodwill: It is an intangible asset that is related with the purchase of one company for another.
Q: Parent Company acquires a subsidiary by issuing 100,000 common shares with a market value of $25 per…
A: The consolidated balance sheet refers to the statement that represents the position of the assets,…
Q: On January 1, 2018, Parent Company purchased 80% of the outstanding shares of Subsidiary Company for…
A: Percentage of Non controlling interest by Parent company = 80%
Q: XYZ Company merged into UUU Company on July 1, 2021. In exchange for the net assets at fair market…
A: Goodwill is the extra consideration paid over and above the actual worth of the net assets of the…
Q: Parent Company acquires 15% of Subsidiary Company’s ordinary shares for P500,000 cash and carries…
A: Business combination refers to amalgamation, acquisition of one entity by another entity by…
Q: PARENT Corporation acquired 80% of the outstanding shares of SUBSIDIARY Company on June 1, 2022 for…
A: Introduction' Non controlling interest means where stakeholder has less than 50 % equity and has no…
Q: Pencil Company purchases 80% of the outstanding shares of Eraser Company for P9,000,000. The…
A: Goodwill is the premium amount over the net assets of the entity. Goodwill as per partial method…
Q: YSL Corporation acquired 80% of the outstanding ordinary shares of GBX Company on June 1, 2022 for…
A: Solution Shareholder's Equity shows how much the owners of a company have invested in the…
Q: On January 1, 2018, Parent Company purchased 80% of the outstanding shares of Subsidiary Company for…
A: NCI stands Non- Controlling interest which is defined as the situation which happen when the firm…
Parent Company acquires 75% of Subsidiary Company’s ordinary shares for P225,000 cash. At that date, the shares of Subsidiary are currently selling at P41/share. Subsidiary has a total of 8,000 shares outstanding. Also on that date, Subsidiary reports identifiable assets with a book value of P400,000 and a fair value of P510,000, and it has liabilities with a book value and fair value of P190,000.10. What is the
Step by step
Solved in 2 steps with 3 images
- Parent Company acquires 15% of Subsidiary Company’s ordinary shares for P500,000 cash and carries the investmentusing the equity method. A few months later, Parent 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 ofP5,100,000, and it has liabilities with a book value and fair value of P1,900,000.Determine:3. Goodwill arising from the consolidation if The fair value of the 25% non controlling interest in Subsidiary Company is P890,000.Parent Company acquires 15% of Subsidiary Company’s ordinary shares for P500,000 cash and carries the investmentusing the equity method. A few months later, Parent 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 ofP5,100,000, and it has liabilities with a book value and fair value of P1,900,000.Determine: 1. Goodwill arising from the consolidation if The fair value of the 25% non controlling interest in SubsidiaryCompany is P890,000. 2. Goodwill arising from the consolidation if it is to be computed using the full (fair value basis of“Full/Gross-up” Goodwill.Parent 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, Parent 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:1. Goodwill arising from the consolidation if it is to be computed using the proportionate basis or “Partial Goodwill”2. Goodwill arising from the consolidation if it is to be computed using the full (fair value basis of “Full/Gross-up” Goodwill.3. 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 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
- 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 proportionate basis (or Partial Goodwill).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. 300,000Parent 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 Corporation acquired 80% of the outstanding shares of Subsidiary Company on June 1, 2021 for P3,517,500. Subsidiary Company’s stockholder’s equity components at the end of this year are as follows: Ordinary shares, P100 par, P1,500,000, Share premium P675,000 and Retained Earnings P1,335,000. Non-controlling interest is measured at fair value and the fair value is P705,000. The assets of Subsidiary Company were fairly valued, except for inventories, which are overstated by P66,000, and equipment, which was understated by P90,000. Remaining useful life of equipment is 4 years. Stockholder’s equity of Parent Corporation on January 1, 2021 is composed of Ordinary shares P4,500,000, Share premium P1,050,000, Retained Earnings P3,150,000. Goodwill, if any, should be written down by P85,350 at year end. Net Income for the first year of parent is P450,000 and the net income of Subsidiary Company from the date of acquisition is P255,000. Dividends declared at the end of the year…PARENT Corporation acquired 80% of the outstanding shares of SUBSIDIARY Company on June 1, 2022 for P3,517,500. SUBSIDIARY Company’s stockholder’s equity components at the end of this year are as follows; Ordinary shares, P100 par, P1,500,000. Share premium P675,000 and Retained Earnings P1,335,000. Non-controlling interest is measured at fair value and the fair value is P705,000. The assets of SUBSIDIARY were fairly valued, except for inventories, which are overstated by P66,000 and equipment, which was understated by P90,000. Remaining useful life of equipment is 4 years. Stockholder’s equity of PARENT on January 1, 2022 is composed of Ordinary shares P4,500,000, Share premium P1,050,000, Retained Earnings P3,150,000. Goodwill, if any, should be written down by P85,350 at year-end. Net Income for the first year of parent is P450,000 and the net income of subsidiary from the date of acquisition is P255,000. Dividends declared at the end of the year amounted to P120,000 and P90,000 for…arent Corporation issued on March 31, 2021 500,000 shares of its P10 par ordinary shares, P40 market value per share, to acquire all of the outstanding P25 par value ordinary share of Subsidiary A Company and 100,000 shares of the same P10 par ordinary shares of all the outstanding P55 par value ordinary shares of Subsidiary B Company. On this date the fair values of Subsidiary A Company’s assets and liabilities equaled their book values, except for its long-term investment in marketable equity securities for which the aggregate market value exceeded cost by P500,000. The fair values of Subsidiary B Company’s assets and liabilities equaled their book values except for the property plant and equipment which is P800,000 less than the carrying values and inventories which is P100,000 more than the carrying value. On March 31, 2021, immediately before the combination, the stockholders’ equities were: Subsidiary A Company Subsidiary B Company Ordinary Shares 5,500,000…