1. On January 1, 20X2, Tanangonan Company acquired all the assets and assumed all the liabilities of OngCompany. In exchange for the net assets of Ong. Tanangonan gave its bond payable with a maturity valueof P600,000 with a stated rate of 10% interest payable semiannually on June 30 and December 31. Thesaid bond will also mature on January 1, 20X2, and has a yield rate of 12%.The Statement of Financial Position (SFP) of both companies as of January 1, 20X2 were as follows:CashReceivablesInventoriesLandBuildingsAccumulated Depreciation – BuildingsEquipmentAccumulated Depreciation - EquipmentTotal AssetsTanangonanBook ValueP250,000352,700848,300700,000950,000(325,000)262,750(70,050)P2,968,700OngBook ValueP114,000150,000232,000100,000410,000(170,500)136,450(90,450)P881,500Fair ValueP114,000135,000310,000315,00054,90039,450P968,350P95,300260,000Current LiabilitiesBond PayableCommon Stock, P15 par valueCommon Stock, P5 par valueOther Contributed CapitalRetained EarningsTotal EquitiesP292,700P95,300300,0001,200,000950,000526,000P2,968,750236,500170,00079,700P881,500Required:1. Determine the goodwill or gain on bargain purchase from the above acquisition.

When one company acquired 50% of the capital and assets of another company or more is known as…

Answered: Required: 1. Determine the goodwill or…

Business

Accounting

Required: 1. Determine the goodwill or gain on bargain purchase from the above acquisition.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 1RE

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Question

1. On January 1, 20X2, Tanangonan Company acquired all the assets and assumed all the liabilities of Ong
Company. In exchange for the net assets of Ong. Tanangonan gave its bond payable with a maturity value
of P600,000 with a stated rate of 10% interest payable semiannually on June 30 and December 31. The
said bond will also mature on January 1, 20X2, and has a yield rate of 12%.
The Statement of Financial Position (SFP) of both companies as of January 1, 20X2 were as follows:
Cash
Receivables
Inventories
Land
Buildings
Accumulated Depreciation – Buildings
Equipment
Accumulated Depreciation - Equipment
Total Assets
Tanangonan
Book Value
P250,000
352,700
848,300
700,000
950,000
(325,000)
262,750
(70,050)
P2,968,700
Ong
Book Value
P114,000
150,000
232,000
100,000
410,000
(170,500)
136,450
(90,450)
P881,500
Fair Value
P114,000
135,000
310,000
315,000
54,900
39,450
P968,350
P95,300
260,000
Current Liabilities
Bond Payable
Common Stock, P15 par value
Common Stock, P5 par value
Other Contributed Capital
Retained Earnings
Total Equities
P292,700
P95,300
300,000
1,200,000
950,000
526,000
P2,968,750
236,500
170,000
79,700
P881,500
Required:
1. Determine the goodwill or gain on bargain purchase from the above acquisition.

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