2. The Statement of Financial Position (SFP) of Arthur Corporation on June 30, 202X is presented below: Current Assets Land P195,000 1,320,000 660,000 525,000 P2,700,000 Building Equipment Total Assets Liabilities Ordinary Shares, P5 par Share Premium Retained Earnings Total Equities P525,000 900,00 825,000 450,000 P2,700,000 All the assets and liabilities of Arthur were assumed to approximate their fair values except for land and building. It is estimated that the land has a fair value of P2,100,000, and the fair value of the building increased by P480,000. Ezekeil Corporation acquired 80% of Arthur's outstanding shares for P3,000,000. The non-controlling interest is measured at fair value. Required: a. Determine the goodwill or gain on bargain purchase assuming the consideration paid includes control premium of P852,000. b. Determine the goodwill or gain on bargain purchase assuming the consideration paid excludes control premium of P138,000 and the fair value of the non-controlling interest is P736,500.

2. The Statement of Financial Position (SFP) of Arthur Corporation on June 30, 202X is presented below: Current Assets Land P195,000 1,320,000 660,000 525,000 P2,700,000 Building Equipment Total Assets Liabilities Ordinary Shares, P5 par Share Premium Retained Earnings Total Equities P525,000 900,00 825,000 450,000 P2,700,000 All the assets and liabilities of Arthur were assumed to approximate their fair values except for land and building. It is estimated that the land has a fair value of P2,100,000, and the fair value of the building increased by P480,000. Ezekeil Corporation acquired 80% of Arthur's outstanding shares for P3,000,000. The non-controlling interest is measured at fair value. Required: a. Determine the goodwill or gain on bargain purchase assuming the consideration paid includes control premium of P852,000. b. Determine the goodwill or gain on bargain purchase assuming the consideration paid excludes control premium of P138,000 and the fair value of the non-controlling interest is P736,500.

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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Question

2. The Statement of Financial Position (SFP) of Arthur Corporation on June 30, 202X is presented below:
Current Assets
Land
P195,000
1,320,000
660,000
525,000
Building
Equipment
Total Assets
P2,700,000
Liabilities
Ordinary Shares, P5 par
Share Premium
Retained Earnings
Total Equities
P525,000
900,00
825,000
450,000
P2,700,000
All the assets and liabilities of Arthur were assumed to approximate their fair values except for land and
building. It is estimated that the land has a fair value of P2,100,000, and the fair value of the building
increased by P480,000. Ezekeil Corporation acquired 80% of Arthur's outstanding shares for P3,000,000.
The non-controlling interest is measured at fair value.
Required:
a. Determine the goodwill or gain on bargain purchase assuming the consideration paid includes control
premium of P852,000.
b. Determine the goodwill or gain on bargain purchase assuming the consideration paid excludes control
premium of P138,000 and the fair value of the non-controlling interest is P736,500.

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