Question
On January 1, 2015, Losi Company acquired a 30% interest in an associate for P5,000,000. The equity of the associate at the date of acquisition
On January 1, 2015, Losi Company acquired a 30% interest in an associate for P5,000,000. The equity of the associate at the date of acquisition consisted of share capital pf P10,000,000 and retained earnings of P5,000,000. All the identifiable assets and liabilities of the associate were recorded at fair value. The associate reported the following:
2015 2016 Profit before tax 3,000,000 4,000,000 Income tax expense 900,000 1,200,000 Dividend paid 2,500,000 2,000,000 What is the goodwill arising from the acquisition? {
Select one:
a. 2,000,000
b. 0
c. 1,000,000
d. 500,000
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