HU and KLM exchanged equity interest resulting to HIJ obtaining control over KLM. Relevant information follows: (before combination) Consolidated Identifiable assets 2,200,000.00 3,600,000.00 Goodwill Total Assets 2,200,000.00 ? Liabilities 700,000.00 1,300,000.00 Share Capital (P20 par) 800,000.00 976,000.00 Share Premium 300,000.00 1,092,000.00 Retained Earnings 400,000.00 Total Liabilities and Equity 2,200,000.00 Requirements: Compute for the Goodwill or (Gain on Bargain Purchase). Your answer On January 1 2021.NOP acquires 100% interest in QRS in exchange for NOP's 10,000 shares with par value per share of P20 and fair value per share of P200. QRS's net identifiable assets have fair value of P1,920,000 and a book value of P1,850,000. In addition, NOP agrees to provide an additional payment of P400,000 if QRS's 2021 net income will except P3,600,000. The fair value of the contingent consideration is P280,000. The net identifiable asset of NOP have a book value of P3,250,000 and the fair value of P3,375,000. Compute for the consolidated net identifiable asset after the acquisition.
HU and KLM exchanged equity interest resulting to HIJ obtaining control over KLM. Relevant information follows: (before combination) Consolidated Identifiable assets 2,200,000.00 3,600,000.00 Goodwill Total Assets 2,200,000.00 ? Liabilities 700,000.00 1,300,000.00 Share Capital (P20 par) 800,000.00 976,000.00 Share Premium 300,000.00 1,092,000.00 Retained Earnings 400,000.00 Total Liabilities and Equity 2,200,000.00 Requirements: Compute for the Goodwill or (Gain on Bargain Purchase). Your answer On January 1 2021.NOP acquires 100% interest in QRS in exchange for NOP's 10,000 shares with par value per share of P20 and fair value per share of P200. QRS's net identifiable assets have fair value of P1,920,000 and a book value of P1,850,000. In addition, NOP agrees to provide an additional payment of P400,000 if QRS's 2021 net income will except P3,600,000. The fair value of the contingent consideration is P280,000. The net identifiable asset of NOP have a book value of P3,250,000 and the fair value of P3,375,000. Compute for the consolidated net identifiable asset after the acquisition.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:HIJ and KLM exchanged equity interest resulting to HIJ obtaining control over KLM. Relevant information follows:
HIJ
(before combination)
Consolidated
Identifiable assets
2,200,000.00
3,600,000.00
Goodwill
?
Total Assets
2,200,000.00
?
Liabilities
700,000.00
1,300,000.00
Share Capital (P20 par)
800,000.00
976,000.00
Share Premium
300,000.00
1,092,000.00
Retained Earnings
400,000.00
?
Total Liabilities and Equity
2,200,000.00
?
Requirements: Compute for the Goodwill or (Gain on Bargain Purchase).
Your answer
On January 1 2021 NOP acquires 100% interest in QRS in exchange for NOP's 10,000 shares with par
value per share of P20 and fair value per share of P200. QRS's net identifiable assets have fair value
of P1,920,000 and a book value of P1,850,000. In addition, NOP agrees to provide an additional
payment of P400,000 if QRS's 2021 net income will except P3,600,000. The fair value of the contingent
consideration is P280,000. The net identifiable asset of NOP have a book value of P3,250,000 and the
fair value of P3,375,000. Compute for the consolidated net identifiable asset after the acquisition.
Your answer
Transcribed Image Text:On January 1 2021.NOP acquires 100% interest in QRS in exchange for NOP's 10,000 shares with par
value per share of P20 and fair value per share of P200. QRS's net identifiable assets have fair value
of P1,920,000 and a book value of P1,850,000. In addition, NOP agrees to provide an additional
payment of P400,000 if QRS's 2021 net income will except P3,600,000. The fair value of the contingent
consideration is P280,000. The net identifiable asset of NOP have a book value of P3,250,000 and the
fair value of P3,375,000. Compute for the consolidated net identifiable asset after the acquisition.
Your answer
On January 1, 2021, ABC acquired all the assets and assumed all the liabilities of DEF Co. for P4,500,000. Relevant information
F11
follows:
Fair Values
ASSETS
Cash
Carrying Value
55,000
55,000
Receivable
800,000
800,000
Allowance for Doubtful Accounts
150,000
180,000
Inventory
700,000
750,000
Land
3,500,000
4,000,000
Goodwill
150,000
200,000
Liabilities
1,555,000
1,555,0000
DEC Co. has research and development projects with fair value of P100,000. ABC does not intend to use those R&Ds.
However, there have been exchange transactions involving the information generated from DEF, but those transactions are
infrequent.
All fair value adjustments result to temporary differences but do not affect the tax bases of the assets and liabilities. The
tax rate is 30%.
ABC incurred P200,000 on general administrative costs of maintaining an internal acquisition department.
Compute the goodwill (gain on bargain purchase)?
Your answer
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