Parent Company acquires 15% of Subsidiary Company’s ordinary shares for P500,000 cash and carries the investment using the equity method. A few months later, Parent purchases another 60% of Subsidiary’s ordinary shares for P2,160,000. At that date, Subsidiary Company reports identifiable assets with a book value of P3,900,000 and a fair value of P5,100,000, and it has liabilities with a book value and fair value of P1,900,000. Determine:3. Goodwill arising from the consolidation if The fair value of the 25% non controlling interest in Subsidiary Company is P890,000.
Parent Company acquires 15% of Subsidiary Company’s ordinary shares for P500,000 cash and carries the investment using the equity method. A few months later, Parent purchases another 60% of Subsidiary’s ordinary shares for P2,160,000. At that date, Subsidiary Company reports identifiable assets with a book value of P3,900,000 and a fair value of P5,100,000, and it has liabilities with a book value and fair value of P1,900,000. Determine:3. Goodwill arising from the consolidation if The fair value of the 25% non controlling interest in Subsidiary Company is P890,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Parent Company acquires 15% of Subsidiary Company’s ordinary shares for P500,000 cash and carries the investment
using the equity method. A few months later, Parent purchases another 60% of Subsidiary’s ordinary shares for P2,160,000.
At that date, Subsidiary Company reports identifiable assets with a book value of P3,900,000 and a fair value of
P5,100,000, and it has liabilities with a book value and fair value of P1,900,000.
Determine:3.
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