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 of the goodwill is attributable to the controlling interest ?
PreviousNext
Definition Definition Intangible asset that includes proprietary or intellectual property and brand value of a firm. Goodwill is recorded in the books when a firm purchases another firm and the purchase price is more than the fair value of net identifiable assets of the acquired business. The amount of goodwill is recorded on the asset side of the balance sheet (statement of financial position).
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.