PROBLEM IX Tala Company purchased 35% interest in Kilometro Company for P5,600,000 on July 15, 2020. Tala already held a 25% interest purchased for P3,000,000. As of this date, the carrying value of the identifiable net assets of Kilometro totaled P17,000,000. The carrying value of the identifiable net assets of Kilometro equal their fair values except for the undervaluation of Inventories and Machineries by P200,000 and P1,000,000 respectively. The fair value of the noncontrolling interest on July 15, 2020 is P7,000,000. 1. The previously held interest at 25% is valued on July 15, 2020 at: 2. How much is the gain on bargain purchase to be recognized as a result of the business combination?

PROBLEM IX Tala Company purchased 35% interest in Kilometro Company for P5,600,000 on July 15, 2020. Tala already held a 25% interest purchased for P3,000,000. As of this date, the carrying value of the identifiable net assets of Kilometro totaled P17,000,000. The carrying value of the identifiable net assets of Kilometro equal their fair values except for the undervaluation of Inventories and Machineries by P200,000 and P1,000,000 respectively. The fair value of the noncontrolling interest on July 15, 2020 is P7,000,000. 1. The previously held interest at 25% is valued on July 15, 2020 at: 2. How much is the gain on bargain purchase to be recognized as a result of the business combination?

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter12: Auditing Long-lived Assets And Merger And Acquisition Activity

Section: Chapter Questions

Problem 37RQSC

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