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.

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.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 44P

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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 P195,000Land 1,320,000Building 660,000Equipment 525,000Total Assets P2,700,000Liabilities P525,000Ordinary Shares, P5 par 900,00Share Premium 825,000Retained Earnings 450,000Total Equities P2,700,000All 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…
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Illustration 1. Measuring Goodwill/Gain on Bargain PurchaseOn January 1, 2021, Amahan Co. acquired all of the assets and assumed all of the liabilities of Anak, Inc. As of this date, the carrying amounts and fair values of the assets and liabilities of Anak acquired by Amahan are shown below: On the negotiation for the business combination, Amahan Co. incurred the followingtransaction costs: P25,000.00 for legal fees; P 75,000.00 for accounting fees and P 50,000.00 for consultancy fees. 1. How much is the goodwill (gain on bargain purchase) on the businesscombination?a. (465,000.00)b. 185,000.00c. (190,000.00)d. 310,000.00
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S acquired 100 percent of F for P275,000. At the date of acquisition, F had the following book and market values: (see image below) What is the amount of the “Investment in F” account on S’s financial records at the acquisition date? What amount of pre-acquisition earnings is eliminated in the acquisition date worksheet elimination? Please answer in good accounting form. Thank you!
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