BusCom Prob 6 8 1

Rejuso, Khiara Nicole
3BSA
Problem 6:
Common Stocks
FV Assets 17,000,000 Additional Paid in Capital
FV Liabilities 4,000,000 Total
FV of Net Identifiable Assets 13,000,000 Contingent Consideration
Cost of Acquisition
Additional Info:
A. Detemine the Cost of Acquisition and Goodwill on December 31, 2020
Debit Credit
Dec. 31, 2020 FVNA 13,000,000 13,800,000
Goodwill 800,000
Contingent Consideration 1,800,000 13,800,000
Common Stocks 10,000,000
Additional Paid in Capital 2,000,000
B. What is the entry needed if the net income of the combined companies for 2021 is over Php 8M and the fair value
of the shares of PARENT at the end of 2021 is Php 110 per share?
Debit Credit
Dec. 31, 2021 Additional Paid in Capital 1,000,000
Goodwill 800,000
Gain on Bargain Purchase 200,000
Problem 7:
The statement of Financial Position of BRANDY Corporation on June 30, 2020 is presented below:
Fair Value
Current Assets 195,000 195,000 Liabilities
Land 1,320,000 2,100,000 Capital Stock, Php 5 par
Building 660,000 1,140,000 Additional Paid in Capital
Equipment 525,000 525,000 Retained Earnings
TOTAL 2,700,000 3,960,000 TOTAL
Liabilities 525,000
Fair Value of Net Assets 3,435,000
A. Assuming the consideration paid includes control premium of P250 000, how much is the goodwill/(gain on
acquisition) on the consolidated financial statement?
Price Paid (80%) 3,000,000 Jun. 30, 2020 Current Assets
NCI (20%) 750,000 Land
Total 3,750,000 Building
FVNA 3,435,000 Equipment
Goodwill 315,000 Goodwill
Forumula: Price Paid + NCI = FVNA + Goodwill Liabilities

Consideration Paid
Non-Controlling Interest
B. Assuming the consideration paid excludes a control premium of P138 000 and the fair value of the non-controlling
interest is P736 500, how much is the goodwill/(gain on acquisition) on the consolidated financial statement?
Price Paid 3,000,000 Jun. 30, 2020 Current Assets

NCI 736,500 Land
Control Premium 138,000 Building
Total 3,874,500 Equipment
FVNA 3,435,000 Goodwill
Goodwill 439,500
Liabilities
Consideration Paid
Non-Controlling Interest
Control Premium
Problem 8:
On January 2, 2020, the Statement of Financial Position of HANDYMAN CO. and ACE HARDWARE CO. immediate
before the combination are:
ACE
HANDY MAN HARDWARE
CO. CO.
Equipment
Cash 2,700,000 90,000
Inventories 1,800,000 180,000
PPE 4,500,000 630,000 918,000
Total: 9,000,000 1,188,000
Current Liabilities 540,000 90,000

Ordinary Shares, P100 par 900,000 8,460,000 90,000 810,000
APIC 2,700,000 180,000
Retained Earnings 4,860,000 540,000
Total: 9,000,000 900,000
A.
Consideration Paid (80%) 820,800 HANDY MAN CO.
NCI FVNA*20% 0.2 219,600 ACE HARDWARE CO.
Total 1,040,400 NCI
FVNA 1,098,000 Gain on Bargain Purchase
Gain on Bargain Purchase -57,600 CONSOLIDATED SHE:
B.
Consideration Paid (90%) 1,458,000 HANDY MAN CO.
NCI (10%) 162,000 ACE HARDWARE CO.
Total 1,620,000 NCI
FVNA 1,098,000 TOTAL SHE:
Gain on Bargain Purchase 522,000
mon Stocks 100,000 100.00 10,000,000
onal Paid in Capital 100,000 20.00 2,000,000
12,000,000
ngent Consideration 1,800,000
of Acquisition 13,800,000
Cost of Acquisition 13,800,000

FV of Net Identifiable Assets 13,000,000
Goodwill 800,000
Php 8M and the fair value
Cost of Acquisition 12,800,000

FV of Net Identifiable Assets 13,000,000
Goodwill/Gain on BP -200,000
d below:
Fair Value
525,000
al Stock, Php 5 par 900,000 2,175,000
onal Paid in Capital 825,000
ned Earnings 450,000
2,700,000
e goodwill/(gain on
Debit Credit
195,000 4,275,000
2,100,000
1,140,000
525,000
315,000
525,000 4,275,000
deration Paid 3,000,000
Controlling Interest 750,000
alue of the non-controlling

ancial statement?
Debit Credit
195,000 4,399,500
2,100,000
1,140,000
525,000
439,500
525,000 4,399,500
deration Paid 3,000,000
Controlling Interest 736,500
ol Premium 138,000
RDWARE CO. immediately
Total Assets 1,188,000

Total Liabilities 90,000
FVNA 1,098,000
8,460,000 HANDY MAN CO. 9,000,000
- ACE HARDWARE CO. 1,188,000
219,600 Less: Cash 820,800
57,600 TOTAL ASSETS: 9,367,200
8,737,200
8,460,000 HANDY MAN CO. 9,000,000

- ACE HARDWARE CO. 1,188,000
162,000 Goodwill 522,000
8,622,000 Less: Cash 1,458,000
CONSOLIDATED ASSETS: 9,252,000

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Rejuso, Khiara Nicole

A. Detemine the Cost of Acquisition and Goodwill on December 31, 2020

Forumula: Price Paid + NCI = FVNA + Goodwill Liabilities

Price Paid 3,000,000 Jun. 30, 2020 Current Assets

Current Liabilities 540,000 90,000

Cost of Acquisition 13,800,000

Php 8M and the fair value

Cost of Acquisition 12,800,000

alue of the non-controlling

RDWARE CO. immediately

Total Assets 1,188,000

8,460,000 HANDY MAN CO. 9,000,000

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