Parent Corporation acquired 80% of the outstanding voting stock of Sub Company for P4,500,000 on January 1, 2020 and paid P50,000 for direct acquisition related costs. On this date, Sub Company's stockholders' equity is composed of: Share capital- P2.000,000 Share premium- 1,200,000 Retained earnings- 1,600,000 The excess of cost over book value of interest acquired is allocated as follows: 10% to undervalued inventory, 40% to undervalued plant assets, and the remainder, to goodwill. NCI is measured at fair value. How much is the fair value of the net assets of Sub Company? * G O 5,237,500 O 4,800,000 4,362,500 O 5,212,500
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- Parent Corporation acquired 80% of the outstanding voting stock of Sub Company for P4,500,000 on January 1, 2020 and paid P50,000 for direct acquisition related costs. On this date, Sub Company’s stockholders’ equity is composed of:Share capital- P2,000,000Share premium- 1,200,000Retained earnings- 1,600,000The excess of cost over book value of interest acquired is allocated as follows: 10% to undervalued inventory, 40% to undervalued plant assets, and the remainder, to goodwill. NCI is measured at fair value. how much is the goodwill at the date of acquisition? 412,500 875,000 825,000 437,500Parent Corporation acquired 80% of the outstanding voting stock of Sub Company for P4,500,000 on January 1, 2020 and paid P50,000 for direct acquisition related costs. On this date, Sub Company’s stockholders’ equity is composed of:Share capital- P2,000,000Share premium- 1,200,000Retained earnings- 1,600,000The excess of cost over book value of interest acquired is allocated as follows: 10% to undervalued inventory, 40% to undervalued plant assets, and the remainder, to goodwill. NCI is measured at fair value. How much is the fair value of the net assets of Sub Company? A. 4,800,000 B. 5,212,500 C. 4,362,500 D. 5,237,500Parent Corporation acquired 80% of the outstanding voting stock of Sub Company for P4,500,000 on January 1, 2020 and paid P50,000 for direct acquisition related costs. On this date, Sub Company’s stockholders’ equity is composed of:Share capital- P2,000,000Share premium- 1,200,000Retained earnings- 1,600,000The excess of cost over book value of interest acquired is allocated as follows: 10% to undervalued inventory, 40% to undervalued plant assets, and the remainder, to goodwill. NCI is measured at fair value. How much is the fair value of the net assets of Sub Company? How much is the goodwill at the date of acquisition?
- Parent Corporation acquired 80% of the outstanding voting stock of Sub Company for P4,500,000 on January 1, 2020 and paid P50,000 for direct acquisition related costs. On this date, Sub Company's stockholders' equity is composed of: Share capital- P2,000,000 Share premium- 1,200,000 Retained earnings- 1,600,000 The excess of cost over book value of interest acquired is allocated as follows: 10% to undervalued inventory, 40% to undervalued plant assets, and the remainder, to goodwill. NCI is measured at fair value. 1. How much is the fair value of the net assets of Sub Company? 2. How much is the goodwill at the date of acquisition?Entity A acquired 80% of the outstanding voting stock of Entity B for P4,500,000 on March 1, 2019 and paid P50,000 for direct acquisition related costs. On this date, Entity B’s stockholders’ equity is composed of:Share capital- P2,000,000Share premium- 1,200,000Retained earnings- 1,600,000The excess of cost over book value of interest acquired is allocated as follows: 10% to undervalued inventory, 40% to undervalued plant assets, and the remainder, to goodwill. NCI is measured at fair value. How much is the fair value of the net assets of Entity B?On 1 July 2020 P Ltd purchased 100% of the issued capital of S Ltd for a purchase price of $859,000. At that date the shareholders’ equity of S Ltd disclosed: Share capital $121,000 General reserve $50,000 Retained earnings $260,000 Additional information: At the date of acquisition, all net identifiable assets of Sub Ltd were recorded at fair value Sales by S to P Ltd were $67,000. P Ltd sold inventory of $109,000 to S Ltd on 1 July 2021. The original cost of this inventory to P Ltd was $53,000. S Ltd has 47% of this inventory on hand at 30 June 2022 Company tax rate is 30% Requirements: Provide all consolidation journal entries (including workings) in next part of this question Compute the amount of 'realised profit' of the inventory transaction above in the form of 'cost of goods sold' and enter the amount in the answer space below
- E Company purchased 80% of the outstanding common stock of P Company on January 2, 2020, for $390,000. Balance sheets for E Company and P Company immediately after the stock acquisition were as follows: Current assets Investment in P Company Plant and equipment (net) Land Current liabilities Long-term notes payable Common stock Other contributed capital Retained earnings E Company $166,000 390,000 560,000 48,000 $1,164,000 $124,000 -0- 510,000 340,000 190,000 $1,164,000 P Company $95,000 -0- 228,000 131,000 $454,000 $44,000 31,000 180,000 64,000 135,000 $454,000 P Company owed E Company $22,000 on open account on the date of acquisition. Prepare a consolidated balance sheet for E and P Companies on the date of acquisition. Any difference between the value implied by the purchase price of the investment and the book value of net assets acquired relates to subsidiary land. The book values of P Company's other assets and liabilities are equal to their fair values. (List assets in order of…On 1 July 2021, Xero Ltd acquired 90% of the issued shares of Accounting Ltd for $750,000 when the equity of Accounting Ltd consisted of: Share Capital $400,000 Retained Earnings $150,000 Asset Revaluation reserve $50,000 At the acquisition date all the identifiable assets and liabilities of Accounting Ltd were recorded at fair value except for the following assets: Carrying Amount Fair Value Equipment (Cost $100,000) $160,000 $200,000 Land $560,000 $700,000 The NCI at acquisition date is measured based on the proportionate share of the identifiable assets and liabilities in Accounting Ltd. The tax rate is 30%. Required Prepare Acquisition analysis as of 1 July 2021Parent Company acquired 80% of the outstanding shares of Subsidiary Company for 4,500,000 on January 2, 2020 and paid P50,000 for direct acquisition related costs. On this date, Subsidiary Company’s stockholders’ equity was composed of: Share Capital – P2,000,000; Share Premium – P1,200,000 and Retained Earnings – P1,600,000. The excess of cost over book value was allocated as follows: 10% to undervalued inventory, 40% to over depreciated fixed assets which has a remaining life of 5 years and the remainder to goodwill. Subsidiary reported net income of P200,000 and paid dividends of P150,000 in 2020. The impairment on goodwill for 2020 was reported to be P5,000. The NCI in the consolidated balance sheet on December 31, 2020 is?
- SG Company acquired 80% of Popsters Company on January 1, 2019, when the stockholders’ equity of Popsters consisted of:Ordinary shares, P100 par P500,000Paid in capital in excess of par 400,000Retained 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 ----------------------------A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…A Co. acquired 60% of the outstanding shares of B Co. on January 2, 2021. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Income Statement of A Co. and B Co. for 2022 are as follows: A Co. B Co.Net Sales P1,093,750 P437,500Cost of Sales 656,250 262,500Gross Profit 437,500 175,000Operating Expenses 131,250 65,625Operating Income 306,250 109,375Dividend Income 70,000 0Net Income P 376,250 P109,375 B Co. made sales to A Co. of P140,000 in 2021 and P210,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P87,500 of which 20% comes from B Co. and inventory on December 31, 2022 amounting to P105,000 of which 30%…