SG Company's stockholders' equity as of December 31, 2019 is P7,308,000. On January 1, 2020, SG acquires 30% of Popsters Company's ordinary shares for P540,000 cash and by issuing its own shares with a fair value of P1,350,000. SG acquired significant influence over Popsters as a result of stock acquisition. After four months, SG purchases another 60% of Popsters' ordinary shares for a cash payment of P3,942,000. On this date, Popsters reports identifiable assets with carrying value of P6,480,000 and fair value of P11,520,000 and it has liabilities with a book value and fair value of P3,240,000. At the acquisition date, net loss reported by Popsters for the four-month ended amounted to P900,000. The fair value of the 10% non-controlling interest is P1,296,000. Non-controlling interest is valued using the proportionate basis. SG also paid the following: P90,000 for legal fees, P72,000 for finder's fees, P77,400 for accountant's fees, P64,800 for audit fee and P19,800 for printing of stock certificates. Immediately after the business combination, how much is the goodwill or gain on bargain purchase on the date of acquisition? *

SG Company's stockholders' equity as of December 31, 2019 is P7,308,000. On January 1, 2020, SG acquires 30% of Popsters Company's ordinary shares for P540,000 cash and by issuing its own shares with a fair value of P1,350,000. SG acquired significant influence over Popsters as a result of stock acquisition. After four months, SG purchases another 60% of Popsters' ordinary shares for a cash payment of P3,942,000. On this date, Popsters reports identifiable assets with carrying value of P6,480,000 and fair value of P11,520,000 and it has liabilities with a book value and fair value of P3,240,000. At the acquisition date, net loss reported by Popsters for the four-month ended amounted to P900,000. The fair value of the 10% non-controlling interest is P1,296,000. Non-controlling interest is valued using the proportionate basis. SG also paid the following: P90,000 for legal fees, P72,000 for finder's fees, P77,400 for accountant's fees, P64,800 for audit fee and P19,800 for printing of stock certificates. Immediately after the business combination, how much is the goodwill or gain on bargain purchase on the date of acquisition? *

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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