ets 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
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 |
|
|
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 |
|
|
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.
What amount of Investment in Glaive Corporation is to be presented in the consolidated
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