Corvus Company has gained control over the operations of Glaive Corporation by acquiring 75% of its outstanding capital stock for P4,650,000. This amount includes a control premium of P225,000. Data from the balance sheets of the two entities included the following amounts as of the date of acquisition: Corvus Company Glaive Corporation Cash 1,012,500 800,000 Accounts Receivable, net 2,770,000 675,000 Inventory 1,600,000 1,200,000 Land 3,000,000 2,400,000 Building 6,750,000 3,400,000 Accumulated Depreciation - Building (1,687,500) (1,700,000) Equipment 800,000 250,000 Accumulated Depreciation – Equipment (162,000) (50,000) Investment in Glaive Corporation 4,650,000 Total Assets 18,733,000 6,975,000 Accounts Payable 700,000 1,012,000 Other current liabilities 562,500 360,000 Notes payable - long term 1,418,000 Bonds payable 2,500,000 Capital Stock, P100 par 9,000,000 2,500,000 Additional paid-in capital 2,595,000 500,000 Retained earnings 3,375,500 1,185,000 Total 18,733,000 6,975,000 At the date of acquisition, the book values of Glaive Corporation’s net assets and liabilities approximated their fair values except for the following: Fair Values Accounts Receivable, net 600,000 Land 3,000,000 Building 2,000,000 Other current liabilities 412,000 Notes payable - long term 1,118,000 Non-controlling interest is to be measured at fair value. How much Goodwill is to be presented in the separate statement of financial position of the parent company?

Corvus Company has gained control over the operations of Glaive Corporation by acquiring 75% of its outstanding capital stock for P4,650,000. This amount includes a control premium of P225,000. Data from the balance sheets of the two entities included the following amounts as of the date of acquisition: Corvus Company Glaive Corporation Cash 1,012,500 800,000 Accounts Receivable, net 2,770,000 675,000 Inventory 1,600,000 1,200,000 Land 3,000,000 2,400,000 Building 6,750,000 3,400,000 Accumulated Depreciation - Building (1,687,500) (1,700,000) Equipment 800,000 250,000 Accumulated Depreciation – Equipment (162,000) (50,000) Investment in Glaive Corporation 4,650,000 Total Assets 18,733,000 6,975,000 Accounts Payable 700,000 1,012,000 Other current liabilities 562,500 360,000 Notes payable - long term 1,418,000 Bonds payable 2,500,000 Capital Stock, P100 par 9,000,000 2,500,000 Additional paid-in capital 2,595,000 500,000 Retained earnings 3,375,500 1,185,000 Total 18,733,000 6,975,000 At the date of acquisition, the book values of Glaive Corporation’s net assets and liabilities approximated their fair values except for the following: Fair Values Accounts Receivable, net 600,000 Land 3,000,000 Building 2,000,000 Other current liabilities 412,000 Notes payable - long term 1,118,000 Non-controlling interest is to be measured at fair value. How much Goodwill is to be presented in the separate statement of financial position of the parent company?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

	Corvus Company	Glaive Corporation
Cash	1,012,500	800,000
Accounts Receivable, net	2,770,000	675,000
Inventory	1,600,000	1,200,000
Land	3,000,000	2,400,000
Building	6,750,000	3,400,000
Accumulated Depreciation - Building	(1,687,500)	(1,700,000)
Equipment	800,000	250,000
Accumulated Depreciation – Equipment	(162,000)	(50,000)
Investment in Glaive Corporation	4,650,000
Total Assets	18,733,000	6,975,000

Accounts Payable	700,000	1,012,000
Other current liabilities	562,500	360,000
Notes payable - long term		1,418,000
Bonds payable	2,500,000
Capital Stock, P100 par	9,000,000	2,500,000
Additional paid-in capital	2,595,000	500,000
Retained earnings	3,375,500	1,185,000
Total	18,733,000	6,975,000

At the date of acquisition, the book values of Glaive Corporation’s net assets and liabilities approximated their fair values except for the following: