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. The amount of goodwill to be recognized resulting from this combination:

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. The amount of goodwill to be recognized resulting from this combination:

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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