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.

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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