AFAR PROB 3 PLS SHOW SOLUTION

C. Entity A acquired 80,000 out of 100,000 outstanding ordinary shares of Entity B which enabled the former to obtain control of the latter at an acquisition price of P1,000,000. Entity A paid P100,000 acquisition related costs and P50,000 indirect costs of business combination. At the date of acquisition, the net assets of Entity B are reported at P1,600,000. An asset of Entity B is overvalued by P60,000 while one liability is undervalued by P40,000. 26. What is the initial measurement of non-controlling interest in net assets in the consolidated statement of financial position? 27. What is the goodwill or gain on bargain on bargain purchase arising from business combination? D. On January 2, 2020, the Statement of Financial Position of Arden Company and Wonder Company immediately before the combination are: Arden Co. Wonder Co. Cash P2,700,000 P90,000 Inventories 1,800,000 180,000 PPE (net) 4,500,000 630,000 P9,000,000 P900,000 Current Liabilities P540,000 P90,000 Ordinary Shares, P100 par 900,000 90,000 Share Premium 2,700,000 180,000 Retained Earnings 4,860,000 540,000 Total Liabilities and Equity P9,000,000 P900,000 The fair value of Wonder Company's equipment is P918,000. 28. Assuming Arden Company acquired 80% of the outstanding shares of Wonder Company for P820,000 and non-controlling interest is measured at the proportionate share of Wonder Company's identifiable net assets, how much is the consolidated stockholder's equity on the date of acquisition? 29. Assuming Arden Company acquired 90% of the outstanding shares of Wonder Company for P1,458,000 and non-controlling interest is measured at fair value, how much is the total consolidated assets on the date of acquisition