ANSWER A,B,C WITH SOLUTION Consider the following independent situations. In all cases, assume that the fair valueof the acquiree's net assets is the same as the book value.Acquired Interest100%90%75%a.b.C.Amount paid1,450,0001,260,0001,000,000Acquiree CompanyShare Capital1,000,0001,000,0001,000,000Acquiree CompanyShare Premium250,000325,000200,000Acquiree CompanyRetained Earnings300,000(100,000)200,000Required:a. Compute the goodwill or gain from the business combination. Assume that incase bthe non-controlling interest is fair-valued at P140,000 and in case c, the non-controllinginterest is measured at proportionate value of the acquiree's net assets.b. Prepare entries in the books of the acquirer to record the acquisition.c. Prepare consolidation working paper entries.

The Goodwill/Gains from business combination = Investment value - total fair value of share

Required: a. Compute the goodwill or gain from the business combination. Assume that in case b the non-controlling interest is fair-valued at P140,000 and in case c, the non- controlling interest is measured at proportionate value of the acquiree's net assets. b. Prepare entries in the books of the acquirer to record the acquisition. c. Prepare consolidation working paper entries.

Required: a. Compute the goodwill or gain from the business combination. Assume that in case b the non-controlling interest is fair-valued at P140,000 and in case c, the non- controlling interest is measured at proportionate value of the acquiree's net assets. b. Prepare entries in the books of the acquirer to record the acquisition. c. Prepare consolidation working paper entries.

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter7: Property Transactions: Basis, Gain And Loss, And Nontaxable Exchanges

Section: Chapter Questions

Problem 32P

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