Reference no: EM133061536
Question - On January 1, 2019, OKAYLANG A Co. acquired 30% ownership interest in KYAMOTO Inc. for P400,000. Because the investment gave the former significant influence over the latter, the investment was accounted for under equity method.
Two years after the acquisition, OKAYLANG A Co. recognized P200,000 net share in the profits of the associate and P40,000 share in dividends. At the start of third year (January 2022), OKAYLANG A Co. acquired additional shares of 60% in KAYAMOTO Inc. for P3,200,000 and identified that:
a. The previously held 30% interest has a fair value of P720,000.
-KYAMOTO net identifiable assets have a fair value of P4,000,000.
-OKAYLANG A co. elected to measure the non-controlling interest at the non-controlling interest's proportionate share of KYAMOTO's identifiable asset. Determine the goodwill in the above case and provide for the journal entries to record the mentioned transactions.
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