ANSWER A,B,C WITH SOLUTION Consider the following independent situations. In all cases, assume that the fair valueof the acquiree's net assets is the same as the book value.Acquired Interest100%90%75%a.b.C.Amount paid1,450,0001,260,0001,000,000Acquiree CompanyShare Capital1,000,0001,000,0001,000,000Acquiree CompanyShare Premium250,000325,000200,000Acquiree CompanyRetained Earnings300,000(100,000)200,000Required:a. Compute the goodwill or gain from the business combination. Assume that incase bthe non-controlling interest is fair-valued at P140,000 and in case c, the non-controllinginterest 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.

The Goodwill/Gains from business combination = Investment value - total fair value of share

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.

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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