Acquirer Company acquired 30% interest from Acquiree Company by paying cash of P150,000 and issuing its own shares with a fair value of P200,000 on January 2, 2022. As a result, Acquirer acquired a significant influence over Acquiree. On July 1, 2022, Acquirer purchased another 50% of Acquiree’s ordinary share for cash payment of P1,100,000. On this date, the net asset of Acquiree had a fair value of P1,300,000. For the first semester of 2022, Acquiree reported a profit of P900,000 and declared dividends of P100,000. Acquirer opted to measure NCI using the proportionate share. Related to the latest acquisition, Acquirer paid the following: legal fees - P20,000; audit fees – P10,000; and brokerage fees – P10,000. How much is the goodwill/gain on bargain purchase?
Acquirer Company acquired 30% interest from Acquiree Company by paying cash of P150,000 and issuing its own shares with a fair value of P200,000 on January 2, 2022. As a result, Acquirer acquired a significant influence over Acquiree. On July 1, 2022, Acquirer purchased another 50% of Acquiree’s ordinary share for cash payment of P1,100,000. On this date, the net asset of Acquiree had a fair value of P1,300,000. For the first semester of 2022, Acquiree reported a profit of P900,000 and declared dividends of P100,000. Acquirer opted to measure NCI using the proportionate share. Related to the latest acquisition, Acquirer paid the following: legal fees - P20,000; audit fees – P10,000; and brokerage fees – P10,000.
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