Corvus Company has gained control over the operations of Glaive Corporation by acquiring 75% of its outstanding capital stock for P4,650,000. This amount includes a control premium of P225,000. Data from the balance sheets of the two entities included the following amounts as of the date of acquisition:     Corvus Company Glaive Corporation Cash                        1,012,500                           800,000 Accounts Receivable, net                        2,770,000                           675,000 Inventory                        1,600,000                        1,200,000 Land                        3,000,000                        2,400,000 Building                        6,750,000                        3,400,000 Accumulated Depreciation - Building                       (1,687,500)                      (1,700,000) Equipment                          800,000                           250,000 Accumulated Depreciation – Equipment                        (162,000)                          (50,000) Investment in Glaive Corporation                        4,650,000   Total Assets                      18,733,000                        6,975,000       Accounts Payable                          700,000                        1,012,000 Other current liabilities                          562,500                           360,000 Notes payable - long term                          1,418,000 Bonds payable                        2,500,000   Capital Stock, P100 par                        9,000,000                        2,500,000 Additional paid-in capital                        2,595,000                           500,000 Retained earnings                        3,375,500                        1,185,000 Total                      18,733,000                        6,975,000   At the date of acquisition, the book values of Glaive Corporation’s net assets and liabilities approximated their fair values except for the following:     Fair Values Accounts Receivable, net               600,000 Land            3,000,000 Building            2,000,000 Other current liabilities               412,000 Notes payable - long term            1,118,000 Non-controlling interest is to be measured at fair value. How much Goodwill is to be presented in the separate statement of financial position of the parent company?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Corvus Company has gained control over the operations of Glaive Corporation by acquiring 75% of its outstanding capital stock for P4,650,000. This amount includes a control premium of P225,000. Data from the balance sheets of the two entities included the following amounts as of the date of acquisition:

 

 

Corvus Company

Glaive Corporation

Cash

                       1,012,500

                          800,000

Accounts Receivable, net

                       2,770,000

                          675,000

Inventory

                       1,600,000

                       1,200,000

Land

                       3,000,000

                       2,400,000

Building

                       6,750,000

                       3,400,000

Accumulated Depreciation - Building

                      (1,687,500)

                     (1,700,000)

Equipment

                         800,000

                          250,000

Accumulated Depreciation – Equipment

                       (162,000)

                         (50,000)

Investment in Glaive Corporation

                       4,650,000

 

Total Assets

                     18,733,000

                       6,975,000

     

Accounts Payable

                         700,000

                       1,012,000

Other current liabilities

                         562,500

                          360,000

Notes payable - long term

 

                       1,418,000

Bonds payable

                       2,500,000

 

Capital Stock, P100 par

                       9,000,000

                       2,500,000

Additional paid-in capital

                       2,595,000

                          500,000

Retained earnings

                       3,375,500

                       1,185,000

Total

                     18,733,000

                       6,975,000

 

At the date of acquisition, the book values of Glaive Corporation’s net assets and liabilities approximated their fair values except for the following:

 

 

Fair Values

Accounts Receivable, net

              600,000

Land

           3,000,000

Building

           2,000,000

Other current liabilities

              412,000

Notes payable - long term

           1,118,000

Non-controlling interest is to be measured at fair value.

How much Goodwill is to be presented in the separate statement of financial position of the parent company?

 
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