Peer Company acquires 80% of Sky Company's outstanding stock on January 1, 2020, by paying P360,000 cash, and immediately prepares a consolidated balance sheet.Peer also pays P14,400 in indirect cost to accomplish the purchase.The separate balance sheets of the two companies immediately before the consolidation with acquiree's fair value were presented as follows:

Assets

Peer Company

Book Value

Sky Co.

Book Value

Sky Co.

Fair Value

Cash

P420,000

P60,000

P60,000

Accounts receivable

90,000

60,000

60,000

Inventory

120,000

72,000

90,000

Land

210,000

48,000

120,000

Buildings and equipment (net)

480,000

360,000

348,000

Total assets

P1,320,000

P600,000

P678,000

Liabilities and stockholders' equity

Accounts payable

P120,000

P120,000

P120,000

Bonds payable

240,000

120,000

162,000

Common stock, P10 par

600,000

240,000

Paid-in capital in excess of par

60,000

24,000

Retained earnings

300,000

96,000

Total liabilities and stockholders' equity

P1,320,000

P600,000

Required:

1.Journal entry to record investment in the books of the acquirer company.

2.Prepare schedule for determination and allocated excess.

a)Partial goodwill (proportionate basis) approach

b)Full-goodwill (Fair Value basis) approach

3.Prepare the working paper eliminating entries for purposes of preparing consolidated balance sheet.

a)Partial goodwill (proportionate basis) approach

b)Full-goodwill (Fair Value basis) approach

4.A consolidated workpaper on January 1, 2020.

a)Partial goodwill (proportionate basis) approach

b)Full-goodwill (Fair Value basis) approach

5.Compute the Noncontrolling interest on acquisition

a)Partial goodwill (proportionate basis) approach

b)Full-goodwill (Fair Value basis) approach

6.Aconsolidated balance sheet immediately after acquisition.

7.In relation to no. 6 requirement and using partial goodwill (proportionate basis), determine the following consolidated amounts: (a) total assets; (b) total liabilities; (c) ordinary share/common stock; (d) share premium/additional paid-in capital; and (e) Accumulatedprofits/loss (RetainedEarnings).

8.In relation to no. 6 requirement and using Full goodwill (Fair value basis) approach, determine the following consolidated amounts: (a) total assets; (b) total liabilities; (c) ordinary share/common stock; (d) share premium/additional paid-in capital; and (e) Accumulatedprofits/loss (RetainedEarnings).