Parent Corporation acquired 80% of the outstanding voting stock of Sub Company for P4,500,000 on January 1, 2020 and paid P50,000 for direct acquisition related costs. On this date, Sub Company's stockholders' equity is composed of: Share capital- P2,000,000 Share premium- 1,200,000 Retained earnings- 1,600,000 The excess of cost over book value of interest acquired is allocated as follows: 10% to undervalued inventory, 40% to undervalued plant assets, and the remainder, to goodwill. NCI is measured at fair value. 1. How much is the fair value of the net assets of Sub Company? 2. How much is the goodwill at the date of acquisition?
Parent Corporation acquired 80% of the outstanding voting stock of Sub Company for P4,500,000 on January 1, 2020 and paid P50,000 for direct acquisition related costs. On this date, Sub Company's stockholders' equity is composed of: Share capital- P2,000,000 Share premium- 1,200,000 Retained earnings- 1,600,000 The excess of cost over book value of interest acquired is allocated as follows: 10% to undervalued inventory, 40% to undervalued plant assets, and the remainder, to goodwill. NCI is measured at fair value. 1. How much is the fair value of the net assets of Sub Company? 2. How much is the goodwill at the date of acquisition?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Parent Corporation acquired 80% of the outstanding voting stock of Sub Company for P4,500,000 on January 1, 2020 and paid P50,000 for direct acquisition related costs. On this date, Sub Company's
Share capital- P2,000,000
Share premium- 1,200,000
The excess of cost over book value of interest acquired is allocated as follows: 10% to undervalued inventory, 40% to undervalued plant assets, and the remainder, to
1. How much is the fair value of the net assets of Sub Company?
2. How much is the goodwill at the date of acquisition?
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