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12. Silent Company acquires 80% controlling interest in Peaceful Company for P1,200,000. Peaceful Company's identifiable assets and liabilities have fair values of P3,300,000 and P1,700,000, respectively. Included in Peaceful Company's assets is a web press machine with fair value of P900,000 which Silent Co. intends to sell immediately. The machine qualifies for classification as "held for sale". The cost to sell is estimates at P150,000. Silent Co. opts to measure NCI at fair value. How much is the goodwill on combination? a P60,000 b. P40,000 c. P50,000 d. P20,000

12. Silent Company acquires 80% controlling interest in Peaceful Company for P1,200,000. Peaceful Company's identifiable assets and liabilities have fair values of P3,300,000 and P1,700,000, respectively. Included in Peaceful Company's assets is a web press machine with fair value of P900,000 which Silent Co. intends to sell immediately. The machine qualifies for classification as "held for sale". The cost to sell is estimates at P150,000. Silent Co. opts to measure NCI at fair value. How much is the goodwill on combination? a P60,000 b. P40,000 c. P50,000 d. P20,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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12. Silent Company acquires 80% controlling interest in Peaceful Company for P1,200,000. Peaceful Company's identifiable assets and liabilities have fair values of P3,300,000 and P1,700,000, respectively. Included in Peaceful Company's assets is a web press machine with fair value of P900,000 which Silent Co. intends to sell immediately. The machine qualifies for classification as "held for sale". The cost to sell is estimates at P150,000. Silent Co. opts to measure NCI at fair value. How much is the goodwill on combination? a P60,000 b. Р40,000 c. P50,000 d. P20,000 13. Riverdale paid finder's fees of P40,000, legal fees of P13,000, audit fees related to the stock issuance of P10,000, stock registration fees of P5,000, and stock listing application fees of P4,000. Based on the preceding information, under the acquisition method, what amount relating to the business combination would be expensed? a P19,000 ь. Р53,000 c. P63,000 d. P72,000 CHAPTER 1: BUSINESS COMBINATION Page | 47 14. Refer to #13, which of the following is correct? a Share issue cost of P9,000 is chargeable to expense. b. Direct cost of P53,000 is capitalized. c. Share issue costs of P19,000 is chargeable to expense. d. Share issue costs of P19,000 is debited to equity. e. None of the above.
Transcribed Image Text:12. Silent Company acquires 80% controlling interest in Peaceful Company for P1,200,000. Peaceful Company's identifiable assets and liabilities have fair values of P3,300,000 and P1,700,000, respectively. Included in Peaceful Company's assets is a web press machine with fair value of P900,000 which Silent Co. intends to sell immediately. The machine qualifies for classification as "held for sale". The cost to sell is estimates at P150,000. Silent Co. opts to measure NCI at fair value. How much is the goodwill on combination? a P60,000 b. Р40,000 c. P50,000 d. P20,000 13. Riverdale paid finder's fees of P40,000, legal fees of P13,000, audit fees related to the stock issuance of P10,000, stock registration fees of P5,000, and stock listing application fees of P4,000. Based on the preceding information, under the acquisition method, what amount relating to the business combination would be expensed? a P19,000 ь. Р53,000 c. P63,000 d. P72,000 CHAPTER 1: BUSINESS COMBINATION Page | 47 14. Refer to #13, which of the following is correct? a Share issue cost of P9,000 is chargeable to expense. b. Direct cost of P53,000 is capitalized. c. Share issue costs of P19,000 is chargeable to expense. d. Share issue costs of P19,000 is debited to equity. e. None of the above.
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