Parent Company acquired 15% of Subsidiary Company's common stock for P500,000 cash and carried the investment using the cost method. A few months later, Parent purchased another 60% of Subsidiary's stock for P2,160,000. At that date, Subsidiary had identifiable assets of P3,900,000 and a fair value of P5,100,000, and had liabilities with a book value and fair value of P1,900,000. The fair value of the 25% non-controlling interest is P900,000.

Parent Company acquired 15% of Subsidiary Company's common stock for P500,000 cash and carried the investment using the cost method. A few months later, Parent purchased another 60% of Subsidiary's stock for P2,160,000. At that date, Subsidiary had identifiable assets of P3,900,000 and a fair value of P5,100,000, and had liabilities with a book value and fair value of P1,900,000. The fair value of the 25% non-controlling interest is P900,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Parent Company acquired 15% of Subsidiary Company’s common stock for P500,000 cash and carried the investment using the cost method. A few months later, Parent purchased another 60% of Subsidiary’s stock for P2,160,000. At that date, Subsidiary had identifiable assets of P3,900,000 and a fair value of P5,100,000, and had liabilities with a book value and fair value of P1,900,000. The fair value of the 25% non-controlling interest is P900,000.The amount of goodwill to be recognized resulting from this combination:
P Company acquires 15% of Subsidiary Company’s ordinary shares for P500,000 cash and carries the investment using the equity method. A few months later, P Company purchases another 60% of Subsidiary’s ordinary shares for P2,160,000. At that date, Subsidiary Company reports identifiable assets with a book value of P3,900,000 and a fair value of P5,100,000, and it has liabilities with a book value and fair value of P1,900,000. Determine the GOODWILL arising from the consolidation if it is to be computed using the proportionate basis (or Partial Goodwill).
P Company acquires 15% of Subsidiary Company’s ordinary shares for P500,000 cash and carries the investment using the equity method. A few months later, P Company purchases another 60% of Subsidiary’s ordinary shares for P2,160,000. At that date, Subsidiary Company reports identifiable assets with a book value of P3,900,000 and a fair value of P5,100,000, and it has liabilities with a book value and fair value of P1,900,000. Determine the GOODWILL arising from the consolidation if The fair value of the 25% non controlling interest in Subsidiary Company is P890,000. answer quickly
P Company acquires 15% of Subsidiary Company’s ordinary shares for P500,000 cash and carries the investment using the equity method. A few months later, P Company purchases another 60% of Subsidiary’s ordinary shares for P2,160,000. At that date, Subsidiary Company reports identifiable assets with a book value of P3,900,000 and a fair value of P5,100,000, and it has liabilities with a book value and fair value of P1,900,000. Determine the GOODWILL arising from the consolidation if it is to be computed using the full fair value basis of “Full/Gross-up” Goodwill.
P Company acquires 15% of Subsidiary Company’s ordinary shares for P500,000 cash and carries the investment using the equity method. A few months later, P Company purchases another 60% of Subsidiary’s ordinary shares for P2,160,000. At that date, Subsidiary Company reports identifiable assets with a book value of P3,900,000 and a fair value of P5,100,000, and it has liabilities with a book value and fair value of P1,900,000. Determine the GOODWILL arising from the consolidation if The fair value of the 25% non controlling interest in Subsidiary Company is P890,000.
Senpai Company acquires 15% of Kohai Company’s common stock for P600,000 cash and carries the investment using the cost model. A few months later, Senpai purchases another 60% of Kohai Company’s stock for P2,592,000. At that date, Kohai Company reports identifiable assets with a book value of P4,680,000 and a fair value of P6,120,000, and it has liabilities with a book value and fair value of P2,280,000. The fair value of the 25% non-controlling interest in Kohai Company is P1,080,000. Compute the amount of goodwill, using full-goodwill or fair value basis approach: Group of answer choices None of the given P360,000 None P480,000
Senpai Company acquires 15% of Kohai Company's common stock for P600,000 cash and carries the investment using the cost model. A few months later, Senpai purchases another 60% of Kohai Company's stock for P2,592,000. At that date, Kohai Company reports identifiable assets with a book value of P4,680,000 and a fair value of P6,120,000, and it has liabilities with a book value and fair value of P2,280,000. The fair value of the 25% non-controlling interest in Kohai Company is P1,080,000. Compute the amount of goodwill, using full-goodwill or fair value basis approach: O P480,000 O P360,000 O None of the given None
Senpai Company acquires 15% of Kohai Company’s common stock for P600,000 cash and carries the investment using the cost model. A few months later, Senpai purchases another 60% of Kohai Company’s stock for P2,592,000. At that date, Kohai Company reports identifiable assets with a book value of P4,680,000 and a fair value of P6,120,000, and it has liabilities with a book value and fair value of P2,280,000. The fair value of the 25% non-controlling interest in Kohai Company is P1,080,000. Compute for the amount of goodwill, using partial goodwill or proportionate basis approach: a. None b. 480,000 c. None of the given d. 360,000
Senpai Company acquires 15% of Kohai Company’s common stock for P600,000 cash and carries the investment using the cost model. A few months later, Senpai purchases another 60% of Kohai Company’s stock for P2,592,000. At that date, Kohai Company reports identifiable assets with a book value of P4,680,000 and a fair value of P6,120,000, and it has liabilities with a book value and fair value of P2,280,000. The fair value of the 25% non-controlling interest in Kohai Company is P1,080,000. Compute the amount of goodwill, using full-goodwill or fair value basis approach: a. 480,000 b. 360,000 c. None of the given d. None
Senpai Company acquires 15% of Kohai Company’s common stock for P600,000 cash and carries the investment using the cost model. A few months later, Senpai purchases another 60% of Kohai Company’s stock for P2,592,000. At that date, Kohai Company reports identifiable assets with a book value of P4,680,000 and a fair value of P6,120,000, and it has liabilities with a book value and fair value of P2,280,000. The fair value of the 25% non-controlling interest in Kohai Company is P1,080,000. Compute the amount of goodwill, using full-goodwill or fair value basis approach.
Parent Company acquires 15% of Subsidiary Company’s ordinary shares for P500,000 cash and carries the investment using the equity method. A few months later, Parent purchases another 60% of Subsidiary’s ordinary shares for P2,160,000. At that date, Subsidiary Company reports identifiable assets with a book value of P3,900,000 and a fair value of P5,100,000, and it has liabilities with a book value and fair value of P1,900,000. Determine:1. Goodwill arising from the consolidation if it is to be computed using the proportionate basis or “Partial Goodwill”2. Goodwill arising from the consolidation if it is to be computed using the full (fair value basis of “Full/Gross-up” Goodwill.3. Goodwill arising from the consolidation if The fair value of the 25% non controlling interest in Subsidiary Company is P890,000.
Weavile Company acquires 25% of Rhyperior Company's common stock for P380,000 cash and carries the investment using the cost method. After three months, Weavile purchases another 55% of Rhyperior's common stock for P1,100,000. On this date, Rhyperior reports identifiable assets with carrying value of P1,800,000 and fair value of P2,300,000 and it has liabilities with a book value and a fair value of P700.000. The fair value of the 20% non-controlling interest is P360,000.Goodwill valued on the fair value basis: