Parent Company purchases 80% of the outstanding shares of Subsidiary Company for P9,000,000. The carrying value of Subsidiary Company’s net assets at the time of acquisition was P6,000,000 and had a fair value of P8,000,000. Determine the GOODWILL arising from the consolidation if the non-controlling interest is stated at fair value of P2,000,000.

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 30E
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Parent Company purchases 80% of the outstanding shares of Subsidiary Company for P9,000,000. The carrying value of Subsidiary Company’s net assets at the time of acquisition was P6,000,000 and had a fair value of P8,000,000. Determine the GOODWILL arising from the consolidation if the non-controlling interest is stated at fair value of P2,000,000.

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