The amount of goodwill (gain from a bargain purchase) resulting from the business combination is 2. on the date of acquisition, the NCI balance is
The amount of goodwill (gain from a bargain purchase) resulting from the business combination is 2. on the date of acquisition, the NCI balance is
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 25E
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Question
1. The amount of
2. on the date of acquisition, the NCI balance is
Transcribed Image Text:On January 01, 2018, Parent Company acquired 80% of the outstanding stock of Subsidiary Company for
P3,400,000. On the date of acquisition, the condensed statement of financial position of Parent Company and
Subsidiary Company are given as follows:
Parent Company
9,150,000.00
Subsidiary Company
1,830,000.00
Current Assets
Plant and Equipment
Goodwill
13,800,000.00
2,760,000.00
P22,950,000.00
5,700,000.00
300,000.00
P4,890,000.00
1,140,000.00
Total Assets
Liabilities
2,400,000.00
780,000.00
Ordinary Share Capital, 100 par
Share Premium
Retained Earnings
Total Liabilities & SHE
12,000,000.00
3,900,000.00
1,350,000.00
570,000.00
P22,950,000.00
P4,890,000.00
An appraisal made by an independent appraiser indicated that the fair value of Subsidiary Company's assets are
P1,890,000 for current assets and P2,900,000 for plant and equipment. Direct cost of business combination
amounting to P50,000 was paid. Parent Company elected to measure non-controlling interest proportionate to
their share in identifiable net assets.
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