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How much is the result of the combination

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Richmond Industries acquires 25% of Mondrich Company's common stock for P380,000 cash and carries the investment using the cost method. After three months, Richmond purchases another 60% of Mondrich's common stock for P1,200,000 On this date, the acquired company reports identifiable net assets with carrying value of P 1,440,000 and fair value of P1,840,000. The liabilities of the acquired company has a book value and a fair value of P560,000. The fair value of the 15% non-controlling interest is P250,000.

Question 1. How much is the result of the combination?

Question 2. Refer to original facts and effect this: If the fair value of the previous holdings amounts to P400,000, what is the result of the combination?

Reference no: EM132844168

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