What is the goodwill to be recognized by entity a

Reference no: EM132784287

On January 1, 2020, Entity A acquired 15% of outstanding common stocks of Entity B at a price of P120,000 and paid acquisition related costs of 10,000. Entity A acquired the investment for trading purposes. On April 1, 2020, Entity A acquired additional 25% of outstanding common stocks of Entity B at a price of P200,000 and paid acquisition related costs of P30,000. On July 1, 2020, Entity A acquired additional 50% of outstanding common stocks of Entity B at a price of P500,000 an paid acquisition related costs of P50,000. On July 1, 2020 Entity B's net assets kappM at P1,000,000 but its land is overstated by P300,000 while its building is understated by P100,000. It is the company policy of Entity A to initially measure the Non-controlling Interest in Net Assets at fair value. Entity B reported net income for the year ended December 31, 2020 in the amount of P100,000.

Problem 1: What is the goodwill to be recognized by Entity A arising from acquisition of Entity B in its Consolidated Statement of Financial Position as of December 31, 2020?

A. 180,0001

B. 200,000

C. 250,000

D. 300,000

Reference no: EM132784287

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