Required: a. Determine the goodwill or gain on bargain purchase assuming the consideration paid includes control premium of P852,000. b. Determine the goodwill or gain on bargain purchase assuming the consideration paid excludes control premium of P138.000 and the fair value of the non-controlling interest is P736,500.
Required: a. Determine the goodwill or gain on bargain purchase assuming the consideration paid includes control premium of P852,000. b. Determine the goodwill or gain on bargain purchase assuming the consideration paid excludes control premium of P138.000 and the fair value of the non-controlling interest is P736,500.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:2. The Statement of Financial Position (SFP) of Arthur Corporation on June 30, 202X is presented below:
Current Assets
P195,000
1,320,000
660,000
525,000
P2,700,000
Land
Building
Equipment
Total Assets
Liabilities
Ordinary Shares, P5 par
Share Premium
Retained Earnings
Total Equities
P525,000
900,00
825,000
450,000
P2,700,000
All the assets and liabilities of Arthur were assumed to approximate their fair values except for land and
building. It is estimated that the land has a fair value of P2,100.000. and the fair value of the building
increased by P480,000. Ezekeil Corporation acquired 80% of Arthur's outstanding shares for P3,000.000
The non-controlling interest is measured at fair value.
Required:
a. Determine the goodwill or gain on bargain purchase assuming the consideration paid includes control
premium of P852,000.
b. Determine the goodwill or gain on bargain purchase assuming the consideration paid excludes control
premium of P138.000 and the fair value of the non-controlling interest is P736,500.
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