On January 1, 2021, Grey Co. Acquires 80% of the outstanding voting shares of Cristine Corp. Cristine Corp.'s identifiable assets and liabilities have fair values of P3,400,000 and P1,700,000, respectively. Relevant information follows: > Grey Co. Agrees to pay Cristine's former owners P2,000,000 cash, half of which is to be paid on January 1, 2021, while the other half will be paid in five equal annual installments starting December31, 2021. The current market rate of interest on January 1, 2021 is 12% > Grey Co. Also agrees to provide a technical know-how to be used in Cristine's operations after the business combination. The technical know-how has a fair value of P200,000 > Grey Co. Opts to measure the non-controlling interest at the NCI's proportionate share in Cristine's net identifiable assets Compute the goodwill (gain on bargain purchase).

On January 1, 2021, Grey Co. Acquires 80% of the outstanding voting shares of Cristine Corp. Cristine Corp.'s identifiable assets and liabilities have fair values of P3,400,000 and P1,700,000, respectively. Relevant information follows: > Grey Co. Agrees to pay Cristine's former owners P2,000,000 cash, half of which is to be paid on January 1, 2021, while the other half will be paid in five equal annual installments starting December31, 2021. The current market rate of interest on January 1, 2021 is 12% > Grey Co. Also agrees to provide a technical know-how to be used in Cristine's operations after the business combination. The technical know-how has a fair value of P200,000 > Grey Co. Opts to measure the non-controlling interest at the NCI's proportionate share in Cristine's net identifiable assets Compute the goodwill (gain on bargain purchase).

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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