The Statement of Financial Position (SFP) of Arthur Corporation on June 30, 202X is presented below: Current Assets P195,000 Land 1,320,000 Building 660,000 Equipment 525,000 Total Assets P2,700,000 Liabilities P525,000 Ordinary Shares, P5 par 900,00 Share Premium 825,000 Retained Earnings 450,000 Total Equities P2,700,000 All the assets and liabilities of Arthur were assumed to approximate their fair values except for land and building. It is estimated that the land has a fair value of P2,100,000, and the fair value of the building increased by P480,000. Ezekeil Corporation acquired 80% of Arthur’s outstanding shares for P3,000,000. The non-controlling interest is measured at fair value. Required: a. Determine the goodwill or gain on bargain purchase assuming the consideration paid includes control premium of P852,000. Determine the goodwill or gain on bargain purchase assuming the consideration paid excludes control premium of P138,000 and the fair value of the non-controlling interest is P736,500.
The Statement of Financial Position (SFP) of Arthur Corporation on June 30, 202X is presented below:
Current Assets P195,000
Land 1,320,000
Building 660,000
Equipment 525,000
Total Assets P2,700,000
Liabilities P525,000
Ordinary Shares, P5 par 900,00
Share Premium 825,000
Retained Earnings 450,000
Total Equities P2,700,000
All the assets and liabilities of Arthur were assumed to approximate their fair values except for land and
building. It is estimated that the land has a fair value of P2,100,000, and the fair value of the building
increased by P480,000. Ezekeil Corporation acquired 80% of Arthur’s outstanding shares for P3,000,000.
The non-controlling interest is measured at fair value.
Required:
a. Determine the
premium of P852,000.
Determine the goodwill or gain on bargain purchase assuming the consideration paid excludes control
premium of P138,000 and the fair value of the non-controlling interest is P736,500.
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