On October 01,2019, the Tomoe Co. acquired 100% of the Nanami Co. when the fair value of Nanami's net assets as Php116M and their carrying amount was Php120M. The consideration transferred comprised Php200M in cash transferred at the acquisition date, plus another Php60M in cash to be transferred 11 months after the acquisition date if a specified profit target was met by Nanami. At the acquisition date, there was only a low probability of the profit target being met, so the fair value of the additional consideration liability was Php10M. In the event, the profit target was met and the Php60M cash was transferred. Provide the Journal Entries for the business combination until the measurement period
On October 01,2019, the Tomoe Co. acquired 100% of the Nanami Co. when the fair value of Nanami's net assets as Php116M and their carrying amount was Php120M. The consideration transferred comprised Php200M in cash transferred at the acquisition date, plus another Php60M in cash to be transferred 11 months after the acquisition date if a specified profit target was met by Nanami. At the acquisition date, there was only a low probability of the profit target being met, so the fair value of the additional consideration liability was Php10M. In the event, the profit target was met and the Php60M cash was transferred. Provide the Journal Entries for the business combination until the measurement period
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On October 01,2019, the Tomoe Co. acquired 100% of the Nanami Co. when the fair value of Nanami's net assets as Php116M and their carrying amount was Php120M.
The consideration transferred comprised Php200M in cash transferred at the acquisition date, plus another Php60M in cash to be transferred 11 months after the acquisition date if a specified profit target was met by Nanami. At the acquisition date, there was only a low probability of the profit target being met, so the fair value of the additional consideration liability was Php10M. In the event, the profit target was met and the Php60M cash was transferred.
Provide the
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