Required: a. Compute the goodwill or gain from the business combination. Assume that in case b the non-controlling interest is fair-valued at P140,000 and in case c, the non- controlling interest is measured at proportionate value of the acquiree's net assets. b. Prepare entries in the books of the acquirer to record the acquisition. c. Prepare consolidation working paper entries.
Required: a. Compute the goodwill or gain from the business combination. Assume that in case b the non-controlling interest is fair-valued at P140,000 and in case c, the non- controlling interest is measured at proportionate value of the acquiree's net assets. b. Prepare entries in the books of the acquirer to record the acquisition. c. Prepare consolidation working paper entries.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
ANSWER A,B,C WITH SOLUTION
Transcribed Image Text:Consider the following independent situations. In all cases, assume that the fair value
of the acquiree's net assets is the same as the book value.
Acquired Interest
100%
90%
75%
a.
b.
C.
Amount paid
1,450,000
1,260,000
1,000,000
Acquiree Company
Share Capital
1,000,000
1,000,000
1,000,000
Acquiree Company
Share Premium
250,000
325,000
200,000
Acquiree Company
Retained Earnings
300,000
(100,000)
200,000
Required:
a. Compute the goodwill or gain from the business combination. Assume that in
case b
the non-controlling interest is fair-valued at P140,000 and in case c, the non-
controlling
interest is measured at proportionate value of the acquiree's net assets.
b. Prepare entries in the books of the acquirer to record the acquisition.
c. Prepare consolidation working paper entries.
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