On July 1, 2019, GAR Company acquired 800,000 shares of FAR Company at a price of P13 per share. GAR estimated that the price paid include P1.50 premium in order to gain control over FAR Company. On this date, the fair values of FAR Company’s identifiable assets and liabilities and their carrying values are given below: Book Value Fair Value Current assets P2,000,000 P2,000,000 Property, plant and equipment 9,000,000 11,000,000 Liabilities P3,000,000 Ordinary shares, P5 par 5,000,000 Retained earnings 3,000,000 Determine the amount of goodwill assuming the non-controlling interest is measured at the proportionate share in the net assets:
On July 1, 2019, GAR Company acquired 800,000 shares of FAR Company at a price of P13 per share. GAR estimated that the price paid include P1.50 premium in order to gain control over FAR Company. On this date, the fair values of FAR Company’s identifiable assets and liabilities and their carrying values are given below:
Book Value Fair Value
Current assets P2,000,000 P2,000,000
Property, plant and equipment 9,000,000 11,000,000
Liabilities P3,000,000
Ordinary shares, P5 par 5,000,000
Retained earnings 3,000,000
Determine the amount of
Step by step
Solved in 2 steps
