PROBLEM VI. P Corporation acquired 80% of the outstanding voting stock of S Company for P4,500,000 on January 1, 2020 and pai P50,000 for direct acquisition related costs. On this date, S Company's stockholders' equity is composed of: Share capital Share premium Retained earnings P2,000,000 1,200,000 1,600,000 The excess of cost over book value of interest acquired is allocated as follows: 10% to undervalued inventory which is a sold during the year, 40% to undervalued plant assets which has a remaining life of 5 years, and the remainder, to goodwil S Company reported net income of P200,000 and paid dividends of P150,000 in 2020. The impairment on goodwill for 202 was reported to be P5,000. 1. Goodwill on December 31, 2020 balance sheet. 2. NCINAS.
PROBLEM VI. P Corporation acquired 80% of the outstanding voting stock of S Company for P4,500,000 on January 1, 2020 and pai P50,000 for direct acquisition related costs. On this date, S Company's stockholders' equity is composed of: Share capital Share premium Retained earnings P2,000,000 1,200,000 1,600,000 The excess of cost over book value of interest acquired is allocated as follows: 10% to undervalued inventory which is a sold during the year, 40% to undervalued plant assets which has a remaining life of 5 years, and the remainder, to goodwil S Company reported net income of P200,000 and paid dividends of P150,000 in 2020. The impairment on goodwill for 202 was reported to be P5,000. 1. Goodwill on December 31, 2020 balance sheet. 2. NCINAS.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:PROBLEM VI.
P Corporation acquired 80% of the outstanding voting stock of S Company for P4,500,000 on January 1, 2020 and paid
P50,000 for direct acquisition related costs. On this date, S 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 which is all
sold during the year, 40% to undervalued plant assets which has a remaining life of 5 years, and the remainder, to goodwill.
S Company reported net income of P200,000 and paid dividends of P150,000 in 2020. The impairment on goodwill for 2020
was reported to be P5,000.
1. Goodwill on December 31, 2020 balance sheet.
2. NCINAS.
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