Business Combination

Please answer number 1 a and b, number a and b with solution

1. Nicole Company acquires 75% of Carl John Company (CJC) for P6,000,000. The carrying and fair values of CJC's net assets at the time of acquisition are P4,500,000 and P4,900,000, respectively. Required: a. Determine the goodwill or gain on bargain purchase from the above acquisition if the non-controlling interest (NCI) is to be valued on a proportionate basis. b. Determine the goodwill or gain on bargain purchase from the above acquisition if the NCI is to be valued on a fair value basis. 2. The Statement of Financial Position (SFP) of Arthur Corporation on June 30, 202X is presented below: Current Assets P195,000 Land 1,320,000 Building 660,000 Equipment 525,000 Total Assets P2,700,000 Liabilities P525,000 Ordinary Shares, P5 par 900,00 Share Premium 825,000 Retained Earnings 450,000 Total Equities P2,700,000 All the assets and liabilities of Arthur were assumed to approximate their fair values except for land and building. It is estimated that the land has a fair value of P2,100,000, and the fair value of the building increased by P480,000. Ezekeil Corporation acquired 80% of Arthur's outstanding shares for P3,000,000. The non-controlling interest is measured at fair value. Required: a. Determine the goodwill or gain on bargain purchase assuming the consideration paid includes control premium of P852,000. b. Determine the goodwill or gain on bargain purchase assuming the consideration paid excludes control premium of P138,000 and the fair value of the non-controlling interest is P736,500