Parent Company acquired 15% of Subsidiary Company's common stock for P500,000 cash and carried the investment using the cost method. A few months later, Parent purchased another 60% of Subsidiary's stock for P2,160,000. At that date, Subsidiary had identifiable assets of P3,900,000 and a fair value of P5,100,000, and had liabilities with a book value and fair value of P1,900,000. The fair value of the 25% non-controlling interest is P900,000.
Parent Company acquired 15% of Subsidiary Company's common stock for P500,000 cash and carried the investment using the cost method. A few months later, Parent purchased another 60% of Subsidiary's stock for P2,160,000. At that date, Subsidiary had identifiable assets of P3,900,000 and a fair value of P5,100,000, and had liabilities with a book value and fair value of P1,900,000. The fair value of the 25% non-controlling interest is P900,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Parent Company acquired 15% of Subsidiary Company's common stock for P500,000 cash and carried
the investment using the cost method. A few months later, Parent purchased another 60% of
Subsidiary's stock for P2,160,000. At that date, Subsidiary had identifiable assets of P3,900,000 and a
fair value of P5,100,000, and had liabilities with a book value and fair value of P1,900,000. The fair
value of the 25% non-controlling interest is P900,000.
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