On January 1, 2021, Bass Co. issued equity instruments in exchange for 75% interest in Guitar Co. On acquisition date, Bass Co. elected to measure non-controlling interest at fair value. Bass Co.'s management believes that the fair value of the consideration transferred correlates to the fair value of the controlling interest acquired and that the fair value of the controlling interest is proportionate to the fair value of the remaining interest. Guitar Co.'s net identifiable assets have carrying amount and fair value of P300,000 and P360,000, respectively. The difference is attributable to a building with a remaining useful life of 6 years. The December 31, 2021 statements of financial position of Bass Co. and Guitar Co, are summarized below: Bass Co. Guitar Co. ASSETS Investment in subsidiary (at cost) Other assets TOTAL ASSETS 300,000 1,372,000 1,672,000 496,000 496,000 LIABILITIES AND EQUITY Trade and other payables Share capital Retained earnings Total equity TOTAL LIABILITIES AND EQUITY 292,000 940,000 440,000 1,380,000 1,672,000 120,000 200,000 176,000 376,000 496,000 No dividends were declared by either entity during year. There were also no inter-company transactions and impairment in goodwill. How much is the non-controlling interest in the net assets of the subsidiary on December 31, 2021?
On January 1, 2021, Bass Co. issued equity instruments in exchange for 75% interest in Guitar Co. On acquisition date, Bass Co. elected to measure non-controlling interest at fair value. Bass Co.'s management believes that the fair value of the consideration transferred correlates to the fair value of the controlling interest acquired and that the fair value of the controlling interest is proportionate to the fair value of the remaining interest. Guitar Co.'s net identifiable assets have carrying amount and fair value of P300,000 and P360,000, respectively. The difference is attributable to a building with a remaining useful life of 6 years. The December 31, 2021 statements of financial position of Bass Co. and Guitar Co, are summarized below: Bass Co. Guitar Co. ASSETS Investment in subsidiary (at cost) Other assets TOTAL ASSETS 300,000 1,372,000 1,672,000 496,000 496,000 LIABILITIES AND EQUITY Trade and other payables Share capital Retained earnings Total equity TOTAL LIABILITIES AND EQUITY 292,000 940,000 440,000 1,380,000 1,672,000 120,000 200,000 176,000 376,000 496,000 No dividends were declared by either entity during year. There were also no inter-company transactions and impairment in goodwill. How much is the non-controlling interest in the net assets of the subsidiary on December 31, 2021?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, 2021, Bass Co. issued equity instruments in exchange for 75% interest in Guitar Co. On acquisition date,
Bass Co. elected to measure non-controlling interest at fair value. Bass Co.'s management believes that the fair value of
the consideration transferred correlates to the fair value of the controlling interest acquired and that the fair value of
the controlling interest is proportionate to the fair value of the remaining interest.
Guitar Co.'s net identifiable assets have carrying amount and fair value of P300,000 and P360,000, respectively. The
difference is attributable to a building with a remaining useful life of 6 years.
The December 31, 2021 statements of financial position of Bass Co. and Guitar Co. are summarized below:
Bass Co.
Guitar Co.
ASSETS
Investment in subsidiary (at cost)
300,000
Other assets
1,372,000
1,672,000
496,000
TOTAL ASSETS
496,000
LIABILITIES AND EQUITY
Trade and other payables
292,000
120,000
Share capital
Retained earnings
Total equity
TOTAL LIABILITIES AND EQUITY
940,000
200,000
440,000
176,000
1,380,000
376,000
1,672,000
496,000
No dividends were declared by either entity during year. There were also no inter-company transactions and impairment
in goodwill. How much is the non-controlling interest in the net assets of the subsidiary on December 31, 2021?
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