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SG Company acquired 80% of Popsters Company on January 1, 2019, when the stockholders’ equity of Popsters consisted of: Ordinary shares, P100 par P500,000 Paid in capital in excess of par 400,000 Retained earnings 500,000 SG paid P1,500,000 for the interest acquired plus P100,000 for costs directly attributable to the acquisition and P20,000 for indirect costs. Popsters' carrying value of net assets is equal to their fair values. Questions:  1. The amount of goodwill/(gain on bargain purchase) to be recognized from this combination

SG Company acquired 80% of Popsters Company on January 1, 2019, when the stockholders’ equity of Popsters consisted of: Ordinary shares, P100 par P500,000 Paid in capital in excess of par 400,000 Retained earnings 500,000 SG paid P1,500,000 for the interest acquired plus P100,000 for costs directly attributable to the acquisition and P20,000 for indirect costs. Popsters' carrying value of net assets is equal to their fair values. Questions:  1. The amount of goodwill/(gain on bargain purchase) to be recognized from this combination

FINANCIAL ACCOUNTING
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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SG Company acquired 80% of Popsters Company on January 1, 2019, when the stockholders’ equity of Popsters consisted of:
Ordinary shares, P100 par P500,000
Paid in capital in excess of par 400,000
Retained earnings 500,000


SG paid P1,500,000 for the interest acquired plus P100,000 for costs directly attributable to the acquisition and P20,000 for indirect costs. Popsters' carrying value of net assets is equal to their fair values.

Questions: 

1. The amount of goodwill/(gain on bargain purchase) to be recognized from this combination, assuming SG Company is an SME is:

2. Compute for the net income that must be reflected in the consolidated income statement

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