Answered step by step
Verified Expert Solution
Question
1 Approved Answer
On January 1, 2022, Entity A acquired 15% of outstanding common stocks of Entity B at a price of P120,000 and paid acquisition related costs
On January 1, 2022, Entity A acquired 15% of outstanding common stocks of Entity B at a price of P120,000 and paid acquisition related costs of P10,000. Entity A acquired the investment for trading purposes. On April 1, 2022, Entity A acquired additional 25% of outstanding common stocks of Entity B at a price of P200,000 and paid acquisition related costs of P30,000. On July 1, 2022, Entity A acquired additional 50% of outstanding common stock of Entity B at a price of P500,000 and paid acquisition related costs of P50,000. On July 1, 2020, the Entity B's net assets reported at P1,000,000 but its land is overstated by P300,000 while its building is understated by P100,000. IT is the company policy of Entity A to initially measure the non-controlling interest in net assets at fair value. Entity B reported net income for the year ended Dec 31, 2022 in the amount of P100,000. 1. What is the goodwill to be recognized by entity A arising from acquisition of Entity B in its consolidated statement of financial position as of Dec 31, 2022
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started