Gusion Company purchases 9,000 shares of Layla Company for P70 per share. Before acquisition, Layla Company has the following balance sheet: On the date of acquisition, Gusion believes that the inventory has a fair value of P400,000 and that the property and equipment is worth P500,000. All other assets and liabilities fair value is equal to their carrying amount. The cost of disposal of the noncurrent asset held for sale is P5,000. Layla’a shares was selling ex-dividend. The goodwill/gain on bargain purchase in the consolidated statement is:    A. (P40,000) B. P30,000 C. P185,000 D. (P35,000)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Gusion Company purchases 9,000 shares of Layla Company for P70 per share. Before acquisition, Layla Company has the following balance sheet: On the date of acquisition, Gusion believes that the inventory has a fair value of P400,000 and that the property and equipment is worth P500,000. All other assets and liabilities fair value is equal to their carrying amount. The cost of disposal of the noncurrent asset held for sale is P5,000. Layla’a shares was selling ex-dividend. The goodwill/gain on bargain purchase in the consolidated statement is: 

 

A. (P40,000)
B. P30,000
C. P185,000
D. (P35,000)
Liabilities and Equity
Assets
Cash and cash equivalents P 20,000 Current liabilities
Inventory
Noncurrent asset held for sale 50,000
P250,000
280,000 Common stock, P5 par
50,000
20,000
400,000 APIC
100,000 Retained earnings
P850.000 Total liabilities and equity
Patent
Property and equipment
Goodwill
Total assets
130,000
420.000
P850,000
Transcribed Image Text:Liabilities and Equity Assets Cash and cash equivalents P 20,000 Current liabilities Inventory Noncurrent asset held for sale 50,000 P250,000 280,000 Common stock, P5 par 50,000 20,000 400,000 APIC 100,000 Retained earnings P850.000 Total liabilities and equity Patent Property and equipment Goodwill Total assets 130,000 420.000 P850,000
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