Answered: Compute for the consolidated net…

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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On January 1 2021,NOP acquires 100% interest in QRS in exchange for NOP’s 10,000 shares with par value per share of P20 and fair value per share of P200. QRS’s net identifiable assets have fair value of P1,920,000 and a book value of P1,850,000. In addition, NOP agrees to provide an additional payment of P400,000 if QRS’s 2021 net income will except P3,600,000. The fair value of the contingent consideration is P280,000. The net identifiable asset of NOP have a book value of P3,250,000 and the fair value of P3,375,000. Compute for the consolidated net identifiable asset after the acquisition.

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