2. Mashiho Company acquires 18% of Junkyu Company's stock for P700,000 cash and carries the investment as a financial asset. A few months later, Mashiho purchases another 70% percent of Junkyu Company's stock for P2,520.000. At the said date, Junkyu Company reports identifiable assets with a book value of P3,900.000 and a fair value of P5,250,000. Its liabilities have a book and fair values of P1,500.000 and 1,900,000, respectively. Required: 1. Determine the amount of goodwill or gain on bargain purchase that should be recognized if the non- controlling interest is measured on a proportionate basis. 2. Determine the amount of goodwill or gain on bargain purchase that should be recognized if the non- controlling interest is measured on a fair value basis.

2. Mashiho Company acquires 18% of Junkyu Company's stock for P700,000 cash and carries the investment as a financial asset. A few months later, Mashiho purchases another 70% percent of Junkyu Company's stock for P2,520.000. At the said date, Junkyu Company reports identifiable assets with a book value of P3,900.000 and a fair value of P5,250,000. Its liabilities have a book and fair values of P1,500.000 and 1,900,000, respectively. Required: 1. Determine the amount of goodwill or gain on bargain purchase that should be recognized if the non- controlling interest is measured on a proportionate basis. 2. Determine the amount of goodwill or gain on bargain purchase that should be recognized if the non- controlling interest is measured on a fair value basis.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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