Parent Company purchased 35% interest in Sub Company for P5,600,000 on July 15, 2020. Parent already held a 25% interest purchased for P3,000,000. As of this date, the carrying value of the identifiable net assets of Sub totaled P17,000,000. The carrying value of the identifiable net assets of Sub equal their fair values except for the undervaluation of Inventories and Machineries by P200,000 and P1,000,000 respectively. The fair value of the noncontrolling interest on July 15, 2020 is P7,000,000. How much is the gain on bargain purchase to be recognized as a result of the business combination? * O 1,600,000 O 2,600,000 O 2,320,000 O 1,320,000
Parent Company purchased 35% interest in Sub Company for P5,600,000 on July 15, 2020. Parent already held a 25% interest purchased for P3,000,000. As of this date, the carrying value of the identifiable net assets of Sub totaled P17,000,000. The carrying value of the identifiable net assets of Sub equal their fair values except for the undervaluation of Inventories and Machineries by P200,000 and P1,000,000 respectively. The fair value of the noncontrolling interest on July 15, 2020 is P7,000,000. How much is the gain on bargain purchase to be recognized as a result of the business combination? * O 1,600,000 O 2,600,000 O 2,320,000 O 1,320,000
Question
37
Transcribed Image Text:Parent Company purchased 35% interest in Sub Company for P5,600,000 on July 15, 2020.
Parent already held a 25% interest purchased for P3,000,000. As of this date, the carrying value
of the identifiable net assets of Sub totaled P17,000,000. The carrying value of the identifiable
net assets of Sub equal their fair values except for the undervaluation of Inventories and
Machineries by P200,000 and P1,000,000 respectively. The fair value of the noncontrolling
interest on July 15, 2020 is P7,000,000. How much is the gain on bargain purchase to be
recognized as a result of the business combination? *
O 1,600,000
O 2,600,000
O 2,320,000
O 1,320,000
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