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a. How much is the Goodwill/Gain on Bargain Purchase? b. How much is the Consolidated Assets?

a. How much is the Goodwill/Gain on Bargain Purchase? b. How much is the Consolidated Assets?

FINANCIAL ACCOUNTING
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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a. How much is the Goodwill/Gain on Bargain Purchase?

b. How much is the Consolidated Assets?

c. 

PROBLEM 2-16 On January 1, 2022, Alpha Company acquired 75% of the shares of Beta Company for an amount which is P300,000 over the book value of interest acquired. On this date, the balance sheet of Alpha Company and Beta Company are as follows: BUSINESS CHAPTER 2: CONSOLIDATION OF ACQUISITION Assets Cash Accounts Receivable Inventories Equipment (net) Patents Total Assets Liabilities & Equity Accounts Payable Notes Payable 117 Ordinary Share Capital Ordinary Share Premium Retained Earnings Total Liabilities & Equity Alpha Company P7,500,000 1,700,000 1,150,000 5,000,000 200,000 P15,550,000 P600,000 2,000,000 5,000,000 6,750,000 1,200,000 P15,550,000 DATE Beta Company P1,300,000 450,000 800,000 1,050,000 50,000 P3,650,000 P200,000 2,000,000 600,000 850,000 P3,650,000 The identifiable assets and liabilities of Beta Company are fairly valued except for inventories which is undervalued by P100,000 while equipment is undervalued by P450,000. Paid direct and indirect expenses of P80,000 and 70,000, respectively. The interest not attributable to Alpha Company is measured at fair value.
Transcribed Image Text:PROBLEM 2-16 On January 1, 2022, Alpha Company acquired 75% of the shares of Beta Company for an amount which is P300,000 over the book value of interest acquired. On this date, the balance sheet of Alpha Company and Beta Company are as follows: BUSINESS CHAPTER 2: CONSOLIDATION OF ACQUISITION Assets Cash Accounts Receivable Inventories Equipment (net) Patents Total Assets Liabilities & Equity Accounts Payable Notes Payable 117 Ordinary Share Capital Ordinary Share Premium Retained Earnings Total Liabilities & Equity Alpha Company P7,500,000 1,700,000 1,150,000 5,000,000 200,000 P15,550,000 P600,000 2,000,000 5,000,000 6,750,000 1,200,000 P15,550,000 DATE Beta Company P1,300,000 450,000 800,000 1,050,000 50,000 P3,650,000 P200,000 2,000,000 600,000 850,000 P3,650,000 The identifiable assets and liabilities of Beta Company are fairly valued except for inventories which is undervalued by P100,000 while equipment is undervalued by P450,000. Paid direct and indirect expenses of P80,000 and 70,000, respectively. The interest not attributable to Alpha Company is measured at fair value.
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