FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:D.BLAKE Company acquired a 70% interest in the LISA Corp. for P1,420,000 when the book value of
LISA's identifiable assets and liabilities was P1,200,000; land was undervalued by P200,000. BLAKE
acquired a 65% interest in the MOON Inc. for P300,000 when the fair value of MOON's identifiable
assets and liabilities was P640,000. BLAKE measures non-controlling interest at the relevant share of
the identifiable net assets at the acquisition date. Neither LISA nor MOON has any contingent
liabilities at the amounts in their financial statements. Annual impairment reviews have not resulted
in any impairment losses being recognized.
Under PFRS 3, compute for the goodwill that should be included in BLAKE's consolidated statement
of financial position.
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Step 1 Formula for goodwill/ Gain on Bargain purchase computation:
VIEW Step 2 Goodwill/ Gain on Bargain purchase from acquisition of LISA corp.
VIEW Step 3 Goodwill/ Gain on Bargain purchase from acquisition of Moon Inc.
VIEW Step 4 Goodwill to be included in Black's consolidated financial statements:
VIEW 
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