Use the following information for the next 2 items:2022 Formula One Championship pre-season testing session just started and due to theporpoising safety issues of the Formula One cars of Koenigsegg Racing Limited, the price of its sharesplummeted. This event gave Blue Bull Racing Ltd. the opportunity to bugfy 45% of outstandingstocks of Koenigsegg Racing Ltd on March 5, 2022.It was noted that Blue Bull Racing Ltd. owned 10% of the outstanding shares of Koenigsegg RacingLtd amounting to P1,000,000 as of June 30, 2021 and accounted it as investment in equitysecurities through profit or loss.The following information showed the book value and fair values of Koenigsegg Racing Limited onMarch 5, 2022. Book Value Fair Value Total Assets 12,070,000 15,300,000 Total Liabilities 2,140,000 2,140,000 Additional information are as follows:• Blue Bull Racing Limited total consideration transferred amounted to P6,750,000 inclusiveof control premium of P250,000.• The fair value of non-controlling interest is P5,500,000. 1. How much is the goodwill or gain on bargain purchase?a. 1,012,000b. 1,590,000c. 590,000d. 956,444 2. What is the measurement of previously held shares?a. 1,000,000b. 1,500,000c. 1,444,444d. 1,250,000
Use the following information for the next 2 items:
2022 Formula One Championship pre-season testing session just started and due to the
porpoising safety issues of the Formula One cars of Koenigsegg Racing Limited, the price of its shares
plummeted. This event gave Blue Bull Racing Ltd. the opportunity to bugfy 45% of outstanding
stocks of Koenigsegg Racing Ltd on March 5, 2022.
It was noted that Blue Bull Racing Ltd. owned 10% of the outstanding shares of Koenigsegg Racing
Ltd amounting to P1,000,000 as of June 30, 2021 and accounted it as investment in equity
securities through profit or loss.
The following information showed the book value and fair values of Koenigsegg Racing Limited on
March 5, 2022.
| Book Value | Fair Value | |
| Total Assets | 12,070,000 | 15,300,000 |
| Total Liabilities | 2,140,000 | 2,140,000 |
Additional information are as follows:
• Blue Bull Racing Limited total consideration transferred amounted to P6,750,000 inclusive
of control premium of P250,000.
• The fair value of non-controlling interest is P5,500,000.
1. How much is the
a. 1,012,000
b. 1,590,000
c. 590,000
d. 956,444
2. What is the measurement of previously held shares?
a. 1,000,000
b. 1,500,000
c. 1,444,444
d. 1,250,000
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