Problem 1-4 A condensed Statement of Financial Position of Cable Company at August 1, 2020 and related fair value are presented below: Book Value P368,000 592,500 58,500 P1,019,000 Fair Value P404,500 690,000 48,000 Current Assets Plant Assets Patent (net) Total P107,500 280,000 210,000 421,500 P1,019,000 Current Liabilities P107,500 280,000 Long-term Debt Share Capital, P20 per Retained Earnings Total CHAPTER 1: BUSINESS COMBINATION Page | 28 On August 1, 2020, Sky Corporation paid P800,000 cash for the net assets of Cable Company Required: 1. How much is the goodwill on combination? Journalize the transaction in the book- of Sky. 2. Assuming Sky purchased all the outstanding voting shares of Cable, how much is the goodwill on combination? Joumalized the transaction in the books of Sky. 3. Assuming Sky purchased 80% of the outstanding voting shares of Cable, how- much is the goodwill on combination? Journalized the transaction in the books of Sky. i. If NCI is measured at Fair Value. ii. If NCI is measured at Proportionate.
Problem 1-4 A condensed Statement of Financial Position of Cable Company at August 1, 2020 and related fair value are presented below: Book Value P368,000 592,500 58,500 P1,019,000 Fair Value P404,500 690,000 48,000 Current Assets Plant Assets Patent (net) Total P107,500 280,000 210,000 421,500 P1,019,000 Current Liabilities P107,500 280,000 Long-term Debt Share Capital, P20 per Retained Earnings Total CHAPTER 1: BUSINESS COMBINATION Page | 28 On August 1, 2020, Sky Corporation paid P800,000 cash for the net assets of Cable Company Required: 1. How much is the goodwill on combination? Journalize the transaction in the book- of Sky. 2. Assuming Sky purchased all the outstanding voting shares of Cable, how much is the goodwill on combination? Joumalized the transaction in the books of Sky. 3. Assuming Sky purchased 80% of the outstanding voting shares of Cable, how- much is the goodwill on combination? Journalized the transaction in the books of Sky. i. If NCI is measured at Fair Value. ii. If NCI is measured at Proportionate.
Chapter1: Financial Statements And Business Decisions
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