How much is the unrealized gain in Profit and Loss? a. P 90,000.00 b. P 450,000.00 c. P 500,000.00 d. P 540,000.00 2. How much is the fair value of the net identifiable assets acquired? a. P 1,965,000.00 b. P 2,000,000.00 c. P 1,710,000.00 d. P 1,850,000.00 3. How much is the goodwill (gain on bargain purchase) on the business combination? a. P (50,000.00) b. P 50,000.00 c. P 190,000.00 d. P (150,500.00)
Illustration 2. Business Combination Achieved in Stages and without transfer of consideration On January 1, 2022, Tatay, Co. and Walanay, Inc. combined. As of this date, the book values of the assets, liabilities and equity of Tatay and Walanay before the business combination are as follows:
Case 1: last year, on July 1, 2021, Tatay, Co. acquired 45% ownership interest in Walanay, Inc. for P 450,000.00. Tatay classified the investment as ‘Held for Trading Securities’ (FVPL). Now, January 1, 2022, Tatay, Co. paid P250,000.00 cash from the bank in exchange for an additional 10% ownership interest in Walanay, Inc. The following relevant Information follows:
a.The previously held interest of Tatay are currently quoted at 20% higher than its book value.
b.The assets and liabilities of Walanay are all equivalent to their market values.
c.Tatay elected to measure NCI at ‘proportionate share’.
With the stated facts, answer the following:
1. How much is the unrealized gain in
a. P 90,000.00
b. P 450,000.00
c. P 500,000.00
d. P 540,000.00
2. How much is the fair value of the net identifiable assets acquired?
a. P 1,965,000.00
b. P 2,000,000.00
c. P 1,710,000.00
d. P 1,850,000.00
3. How much is the
combination?
a. P (50,000.00)
b. P 50,000.00
c. P 190,000.00
d. P (150,500.00)
![TATAY CO.
WALANAY, INC.
Asset
Petty Cash Fund
Cash In bank
10,000.00
10,000.00
700,000.00
800,000.00
Receivables
490,000.00
250,000.00
Inventory
500,000.00
150,000.00
Investment held for Trading Securities
450,000.00
Building
1,300,000.00
850,000.00
Goodwill
250,000.00
140,000.00
Total Assets
3,700,000.00
2,200,000.00
Liability and Equity
Liabilities
750,000.00
350,000.00
Share Capital
1,900,000.00
1,000,000.00
Share Premium
650,000.00
530,000.00
Ret ained Earnings
400,000.00
320,000.00
Total Liabilit y and Equity
3,700,000.00
2,200,000.00](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F74f233da-8668-4165-bd4a-15eb510c4389%2F255d6093-0759-4b1c-88f4-9238d2e9a20b%2Fyx7r1qq_processed.png&w=3840&q=75)
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