ACC132_MQ2 a.

What amount of goodwill is associated to the

Problem 1. West, Inc. holds 100 percent of the common
stock of Coast Company, an investment acquired for
P680,000. Immediately following the combination,
West's net assets have a book value of P1,150,000 and
a fair value of P1,390,000. The book value and the fair
value of Coast's net assets on the date of combination
are P400,000 and P550,000, respectively. Immediately
following the combination, a consolidated balance sheet
is prepared.
non-controlling interest? 12,583
b. What amount of total liability will be reported?
174k
c. What is the amount of total assets? 751333
Problem 5. On July 1, 2015, Lander Inc, acquired most
of the outstanding common stock of Watson Co for cash.
The incomplete working paper elimination entries on that
date for the consolidated statement of financial position
of Lander Inc. and its subsidiary are shown next:

Required: Compute for the following: Common Stock Watson 1,500,000

a. Net assets on the consolidated financial statements APIC Watson 750,000
immediately following the combination. 1150k RE Watson 187,500
b. Goodwill on the consolidated financial statements Investment in Watson 1,828,125
immediately following the combination. 130k Non Controlling Interest ?

Problem 2. Rohan Corporation holds assets with a fair

value of P150,000 and a book value of P125,000 and Inventories 62,500
liabilities with a book value and fair value of P50,000. Patent 61,250
What balance will be assigned to the non-controlling Goodwill ?
interest in the consolidated balance sheet if Helms Equipment 31,250
Company pays P90,000 to acquire 75 percent ownership Bonds Payable 15,650
in Rohan and goodwill of P20,000 is reported? 30k Investment in Watson 468,750
Non-Controlling Interest ?
Problem 3. Beta Company acquired 100 percent of the
voting common shares of Standard Video Corporation, Included in the purchase price is a control premium of
its bitter rival, by issuing bonds with a par value and fair P68,750. Calculate the amount of goodwill in the
value of P140,000. Immediately prior to the acquisition, consolidated statement of financial position on July 1,
Beta reported total assets of P500,000, liabilities of 2015 assuming:
P280,000, and stockholders' equity of P220,000. At that a. Non-controlling interest is measured at fair value
date, Standard Video reported total assets of P400,000, b. Non-controlling interest is measured at
liabilities of P250,000, and stockholders' equity of proportionate share
P150,000. Included in Standard's liabilities was an c. Non-controlling interest share in goodwill when it
account payable to Beta in the amount of P20,000, is measured at fair value at its fair value is given
which Beta included in its accounts receivable. at P625,000.

Required: Compute for the following:
a. Total assets on the separate books of Beta
immediately after the acquisition. 640k
b. Total assets on the consolidated financial
statements immediately after the acquisition.
880k
c. Total liabilities on the consolidated financial
statements immediately after the acquisition.
650k
Problem 3. On January 1, 2015, Sabina Corporation
purchased 75% of the common stock of Argo Company.
Separate balance sheets for the companies at the date
of acquisition are given below:
Problem 6. Arandilla Company acquired 70% of the
outstanding ordinary shares of Moscoso Company for
P390, 000 cash. The consideration transferred includes
control premium amounting to P43, 000. The book value
of Moscosos net assets is P400, 000. Moscosos only
over or undervalued assets are land that has a book
value of P200, 000 and a current value of P310, 000.
Non-controlling interest is measured at fair value.
Required: Compute for the following:
a. Goodwill to be reported in the consolidated
financial statements. 0
b. Non-controlling interest in the consolidated
financial statements. 153k

Sabina Argo Problem 7. The condensed statement of financial

Cash 12,000 103,000 position accounts of Padre Rosvel Inc. and Santa Tonee
Accounts Receivable 72,000 13,000 Inc. as of December 31, 2013 shows:
Padre Rosvel Santa
Inventory 66,000 19,000
Tonee
Land 39,000 16,000 Assets P1, 562, 500 P437, 500
Plant Assets 350,000 150,000 Liabilities 812, 500 125, 000
Acc. Dep. (120,000) (30,000) Ordinary share (par P100) 625, 000 250, 000
Investment in Argo 196,000 Retained earnings 125, 000 62, 500
Total Assets 615,000 271,000
On January 1, 2014, Padre Rosvel acquired 2, 250
Accounts Payable 103,000 71,000
shares of Santa Tonee at P110 per share. Non-
Capital Stock 400,000 150,000 controlling interest is measured at its proportionate share
Retained Earnings 112,000 50,000 of the identifiable net assets.
Total Liabilities and Equity 615,000 271,000
Required: Compute for the following:
At the date of combination, the book values of Argos net a. Combined assets in the consolidated statement
assets were equal to the fair value except for Argos of financial position. 1752500
inventory which has a fair value of P30,000. Full goodwill b. Consolidated retained earnings
method is to be used. c. Total Shareholders equity in the consolidated
financial statements. 815k

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