Parent Corporation acquired 80% of the outstanding voting stock of Sub Company for P4,500,000 on January 1, 2020 and paid P50,000 for direct acquisition related costs. On this date, Sub Company's stockholders' equity is composed of: Share capital- P2.000,000 Share premium- 1,200,000 Retained earnings- 1,600,000 The excess of cost over book value of interest acquired is allocated as follows: 10% to undervalued inventory, 40% to undervalued plant assets, and the remainder, to goodwill. NCI is measured at fair value. How much is the fair value of the net assets of Sub Company? * G O 5,237,500 O 4,800,000 4,362,500 O 5,212,500
Parent Corporation acquired 80% of the outstanding voting stock of Sub Company for P4,500,000 on January 1, 2020 and paid P50,000 for direct acquisition related costs. On this date, Sub Company's stockholders' equity is composed of: Share capital- P2.000,000 Share premium- 1,200,000 Retained earnings- 1,600,000 The excess of cost over book value of interest acquired is allocated as follows: 10% to undervalued inventory, 40% to undervalued plant assets, and the remainder, to goodwill. NCI is measured at fair value. How much is the fair value of the net assets of Sub Company? * G O 5,237,500 O 4,800,000 4,362,500 O 5,212,500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Parent Corporation acquired 80% of the outstanding voting stock of Sub Company for
P4,500,000 on January 1, 2020 and paid P50,000 for direct acquisition related costs. On this
date, Sub Company's stockholders' equity is composed of:
Share capital- P2.000,000
Share premium- 1,200,000
Retained earnings- 1,600,000
The excess of cost over book value of interest acquired is allocated as follows: 10% to
undervalued inventory, 40% to undervalued plant assets, and the remainder, to goodwill. NCI
is measured at fair value.
How much is the fair value of the net assets of Sub Company? * G
O 5,237,500
O 4,800,000
4,362,500
O 5,212,500
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