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Compute for the result of the business combination

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Reference no: EM132842957

Question - On January 2, 2020, GBQ Company acquired 80% interest in JKL Company for P412,500 cash. On this date the ordinary shares of JKL amount to P131,200 while its retained earnings amount to P318,750. Non-controlling interest is measured at fair value of P95,000. Fair values of the following assets of the acquire exceeded their book values by: Inventories, P21,000; Equipment (remaining life, 10 years), P12,750.

Required -

1. Compute for the result of the business combination.

2. Compute for the cost of the investment.

Reference no: EM132842957

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