1. The amount of goodwill (gain from a bargain purchase) resulting from the business combination is2. on the date of acquisition, the NCI balance is On January 01, 2018, Parent Company acquired 80% of the outstanding stock of Subsidiary Company forP3,400,000. On the date of acquisition, the condensed statement of financial position of Parent Company andSubsidiary Company are given as follows:Parent Company9,150,000.00Subsidiary Company1,830,000.00Current AssetsPlant and EquipmentGoodwill13,800,000.002,760,000.00P22,950,000.005,700,000.00300,000.00P4,890,000.001,140,000.00Total AssetsLiabilities2,400,000.00780,000.00Ordinary Share Capital, 100 parShare PremiumRetained EarningsTotal Liabilities & SHE12,000,000.003,900,000.001,350,000.00570,000.00P22,950,000.00P4,890,000.00An appraisal made by an independent appraiser indicated that the fair value of Subsidiary Company's assets areP1,890,000 for current assets and P2,900,000 for plant and equipment. Direct cost of business combinationamounting to P50,000 was paid. Parent Company elected to measure non-controlling interest proportionate totheir share in identifiable net assets.

Step 1: Calculation of Identifiable Net Assets of Subsidiary Company Particulars Amount Amount…

Answered: The amount of goodwill (gain from a…

The amount of goodwill (gain from a bargain purchase) resulting from the business combination is 2. on the date of acquisition, the NCI balance is

FINANCIAL ACCOUNTING

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ISBN:9781259964947

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Chapter1: Financial Statements And Business Decisions

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Question

1. The amount of goodwill (gain from a bargain purchase) resulting from the business combination is

2. on the date of acquisition, the NCI balance is

On January 01, 2018, Parent Company acquired 80% of the outstanding stock of Subsidiary Company for
P3,400,000. On the date of acquisition, the condensed statement of financial position of Parent Company and
Subsidiary Company are given as follows:
Parent Company
9,150,000.00
Subsidiary Company
1,830,000.00
Current Assets
Plant and Equipment
Goodwill
13,800,000.00
2,760,000.00
P22,950,000.00
5,700,000.00
300,000.00
P4,890,000.00
1,140,000.00
Total Assets
Liabilities
2,400,000.00
780,000.00
Ordinary Share Capital, 100 par
Share Premium
Retained Earnings
Total Liabilities & SHE
12,000,000.00
3,900,000.00
1,350,000.00
570,000.00
P22,950,000.00
P4,890,000.00
An appraisal made by an independent appraiser indicated that the fair value of Subsidiary Company's assets are
P1,890,000 for current assets and P2,900,000 for plant and equipment. Direct cost of business combination
amounting to P50,000 was paid. Parent Company elected to measure non-controlling interest proportionate to
their share in identifiable net assets.

Definition Definition Intangible asset that includes proprietary or intellectual property and brand value of a firm. Goodwill is recorded in the books when a firm purchases another firm and the purchase price is more than the fair value of net identifiable assets of the acquired business. The amount of goodwill is recorded on the asset side of the balance sheet (statement of financial position).

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