D.BLAKE Company acquired a 70% interest in the LISA Corp. for P1,420,000 when the book value ofLISA's identifiable assets and liabilities was P1,200,000; land was undervalued by P200,000. BLAKEacquired a 65% interest in the MOON Inc. for P300,000 when the fair value of MOON's identifiableassets and liabilities was P640,000. BLAKE measures non-controlling interest at the relevant share ofthe identifiable net assets at the acquisition date. Neither LISA nor MOON has any contingentliabilities at the amounts in their financial statements. Annual impairment reviews have not resultedin any impairment losses being recognized.Under PFRS 3, compute for the goodwill that should be included in BLAKE's consolidated statementof financial position.

Consideration paid Add: Non Controlling Interest Less: Fair value of net identifiable assets…

Answered: Under PFRS 3, compute for the goodwill…

Business

Accounting

Under PFRS 3, compute for the goodwill that should be included in BLAKE's consolidated statement of financial position.

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

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:

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Step 2 Goodwill/ Gain on Bargain purchase from acquisition of LISA corp.

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Step 3 Goodwill/ Gain on Bargain purchase from acquisition of Moon Inc.

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Step 4 Goodwill to be included in Black's consolidated financial statements:

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