Question
Parent Company acquired 80% of the outstanding shares of Subsidiary Company for 5,000,000 on January 2, 2021 and paid P50,000 for direct acquisition related costs.
Parent Company acquired 80% of the outstanding shares of Subsidiary Company for 5,000,000 on January 2, 2021 and paid P50,000 for direct acquisition related costs. On this date, Subsidiary Companys stockholders equity was composed of: Share Capital P2,000,000; Share Premium P1,200,000 and Retained Earnings P1,600,000. The excess of the aggregate of consideration and NCI over book value was allocated as follows: 30% 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 P750,000 and paid dividends of P105,000 in 2021. The impairment on goodwill attributable to the minority interest for 2021 was reported to be P5,000. NCI is measured at fair value. The amount of goodwill to appear in the consolidated financial Statements on December 31, 2021 is:
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