3. On December 31, X4, the book value of Company B's identifiable net assets was $600,000, and there were 40,000 outstanding ordinary shares. Except for the overvalued equipment of Company B by $100,000 on that day, the book amounts of other identifiable assets and liabilities are equivalent to their fair values. Company B issued 160,000 new shares on January 1, X5, all of which were purchased by Company A for $3,200,000 in cash to gain control over Company B, and non-controlling interests were measured based on the proportional share of identifiable net assets. Try to calculate: (1) The shareholding ratio of Company A held by Company B. (Please express as a percentage, for example: 45%) (2) The (14%) answer (1) goodwill generated by Company A's acquisition of Company B's equity. (2)
3. On December 31, X4, the book value of Company B's identifiable net assets was $600,000, and there were 40,000 outstanding ordinary shares. Except for the overvalued equipment of Company B by $100,000 on that day, the book amounts of other identifiable assets and liabilities are equivalent to their fair values. Company B issued 160,000 new shares on January 1, X5, all of which were purchased by Company A for $3,200,000 in cash to gain control over Company B, and non-controlling interests were measured based on the proportional share of identifiable net assets. Try to calculate: (1) The shareholding ratio of Company A held by Company B. (Please express as a percentage, for example: 45%) (2) The (14%) answer (1) goodwill generated by Company A's acquisition of Company B's equity. (2)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:3. On December 31, X4, the book value of Company B's identifiable net assets was $600,000, and there were 40,000 outstanding ordinary shares. Except for the overvalued
equipment of Company B by $100,000 on that day, the book amounts of other identifiable assets and liabilities are equivalent to their fair values. Company B
issued 160,000 new shares on January 1, X5, all of which were purchased by Company A for $3,200,000 in cash to gain control over Company B, and non-controlling interests were
measured based on the proportional share of identifiable net assets.
Try to calculate: (1) The shareholding ratio of Company A held by Company B. (Please express as a percentage, for example: 45%) (2) The
(14%)
answer:
(1)
goodwill generated by Company A's acquisition of Company B's equity.
(2)
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