Reference no: EM133032437

Problem - The Statement of Financial Position of Luster Corporation on June 30, 2013 is presented below:

Current assets	P32,500
Land	220,000
Building	110,000
Equipment	87,500
Total Assets	P450,000
Liabilities	87,500
Capital stock, P5 par	150,000
Additional paid in capital	137,500
Retained earnings	75,000
Total equities	P450,000

All the assets and liabilities of Luster assumed to approximate their fair values except for land and building. It is estimated that the land have a fair value of P350,000 and the fair value of the building increased by P80,000.

Kernel Corporation acquired 80% of Luster's capital stock for P500,000.

Required -

Q1. Assuming the consideration paid includes control premium of P142,000, how much is the goodwill/(gain on acquisition) on the consolidated financial statement?

A. P60,000

B. P48,000

C. P42,000

D. P50,000

Q2. Assuming the consideration paid excludes control premium of P23,000, and the fair value of the non-controlling interest is P122,750, how much is the goodwill/(gain on acquisition) on the consolidated financial statement?

A. P78,250

B. P73,250

C. P69,500

D. P74,750