Reference no: EM132949966

Problem -

1. A Co. acquired 80% interest in B Co. for P1,200,000. On acquisition date, B's identifiable assets and liabilities have fair values of P1,700,000 and P400,000, respectively.

a. How much is the goodwill if A Co. opts to measure the noncontrolling interest at the NCI's proportionate share in B Co.'s net identifiable assets?

b. How much is the goodwill if A Co. opts to measure the noncontrolling interest at fair value?

2. A Co. acquired all the assets and liabilities of B Co. by issuing 10,000 shares with par value of P20 per share and fair value of P100 per share. A Co. incurred P40,000 in issuing the shares and P60,000 in professional fees and administrative costs in effecting the business combination. On acquisition date, B's identifiable assets and liabilities have fair values of P1,800,000 and P900,000, respectively. After the business combination, A Co. will close some of the operating segments of B Co. The closure costs are estimated at P400,000.

a. Compute for the goodwill (gain on bargain purchase).

3. On November 1, 20x1, Entity A acquired all the assets and liabilities of Entity B for P1,800,000. On this date, Entity B's assets and liabilities were valued at P2,600,000 and P900,000, respectively. The assets acquired include a trademark which was assigned a provisional amount of P300,000 because the fair value was not readily obtainable at acquisition date. The trademark has an indefinite useful life. On August 31, 20x2, Entity A confirmed that the acquisition-date fair value of the trademark was P200,000.

a. Compute for the unadjusted and adjusted goodwill.