Advanced Accounting
12th Edition
ISBN: 9781305084858
Author: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Publisher: Cengage Learning
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Question
Chapter 2, Problem 2.1.1P
To determine
Introduction: Acquisition is a corporate term used to represent purchase of another company and gaining the ownership of the company.
To record: Acquisition or the investment entry with all other necessary entries in the books of acquiring company.
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Students have asked these similar questions
Company X acquired 100% of the voting shares of Company Y for $137,500 on 1/1/2022. The fair
value of the net assets of Company Y at the date of acquisition was $150,000. This is an example
of a(n):
Select one:
O
O
FELIC
a. revaluation adjustment
b. bargain purchase
c. extraordinary loss
d. positive differential
id
(i) On 01 January 2013, Gordon Plc acquired 75% of Brown Ltd for $300,000 when Brown`s share capital and reserves were $252,000. Prior to the acquisition, the net book value of Brown`s non-current assets was $90,000. Brown revalued its non-current assets immediately prior to the acquisition to fair value and included the revaluation in its statement of financial position.
(ii) On 01 January 2015, Gordon acquired 20% of Boris Ltd for $72,000 when the fair value of Boris`s net assets were $42,000.
(iii) Goodwill has been impaired in Brown by $77,700 and in Boris by $31,800
(iv) At the year end, Gordon Plc has inventory acquired from Brown and Boris. Brown had invoiced the inventory to Garden for $6,000 – the cost to Brown had been $1,200 and Boris had invoiced Gordon for $3,000 – the cost to Boris had been $1,800.
REQUIRED
(a) Prepare Gordon Plc`s Consolidated Statement of Financial Position as at 31
December 2019.
1. An 80% interest was acquired by the Betson Corp. in the Lakers Company on July 1, 2014. The
consideration transferred was P50,000.000. Lakers Company net assets were P42,500,000 at acquisition
date.
Requirement: Compute the amount of goodwill assuming Betson Corp. elects to measure the non-
controlling interest.
a.proportionate to its share on the net assets; and
b. at fair value
2. Condensed statements of financial position of Pete Company and Sally Company on July 31, 2014
were as follows:
Sally Co.
P670,000
Pete Co.
Total Assets
P700,000
Total Liabilities
P300,000
P300,000
250,000
Ordinary Share Capital
Paid-in capital in excess of par
Retained Earnings(deficit)
Total Liabilities and Equity
200,000
80,000
130,000
(10,000)
P670,000
120,000
P700,000
On July 31, 2014, Pete and Sally entered into a combination. The new company, Person Corp. issued
75,000 shares of P10 par value ordinary share capital for all the outstanding share capital of Pete and
Sally.
Requirement:
a. Prepare the…
Chapter 2 Solutions
Advanced Accounting
Ch. 2 - Prob. 1UTICh. 2 - Prob. 2UTICh. 2 - Prob. 3UTICh. 2 - Prob. 4UTICh. 2 - Prob. 5UTICh. 2 - Prob. 6UTICh. 2 - Santos Corporation is considering investing in...Ch. 2 - Prob. 2.1ECh. 2 - Prob. 2.2ECh. 2 - Prob. 3.1E
Ch. 2 - Prob. 3.2ECh. 2 - Prob. 4.1ECh. 2 - Prob. 4.2ECh. 2 - Prob. 4.3ECh. 2 - Prob. 5.1ECh. 2 - Prob. 5.2ECh. 2 - Prob. 6.1ECh. 2 - Prob. 6.2ECh. 2 - Prob. 7.1ECh. 2 - Prob. 7.2ECh. 2 - Prob. 8.1ECh. 2 - Prob. 9.1ECh. 2 - Prob. 9.2ECh. 2 - Prob. 9.4ECh. 2 - Prob. 2A.1AECh. 2 - Prob. 2.1.1PCh. 2 - Prob. 2.1.2PCh. 2 - Prob. 2.2.1PCh. 2 - Prob. 2.2.2PCh. 2 - Prob. 2.2.3PCh. 2 - Prob. 2.3.1PCh. 2 - Prob. 2.3.2PCh. 2 - Prob. 2.3.3PCh. 2 - Prob. 2.4.1PCh. 2 - Prob. 2.4.2PCh. 2 - Prob. 2.4.3PCh. 2 - Prob. 2.5.1PCh. 2 - Prob. 2.5.2PCh. 2 - Prob. 2.5.3PCh. 2 - Prob. 2.6.1PCh. 2 - Prob. 2.6.2PCh. 2 - Prob. 2.7.1PCh. 2 - Prob. 2.7.2PCh. 2 - Prob. 2.8.1PCh. 2 - Prob. 2.8.2PCh. 2 - Prob. 2.9.1PCh. 2 - Prob. 2.9.2PCh. 2 - Prob. 2.10.1PCh. 2 - Prob. 2.11.1PCh. 2 - Prob. 2.12.1PCh. 2 - Prob. 2.12.2PCh. 2 - Prob. 2.13.1PCh. 2 - Prob. 2.13.2PCh. 2 - Prob. 2.14.1PCh. 2 - Prob. 2.14.2PCh. 2 - Prob. 2.15.1PCh. 2 - Prob. 2.15.2PCh. 2 - Prob. 2A.1.1APCh. 2 - Prob. 2A.1.2APCh. 2 - Prob. 2.1.1CCh. 2 - Prob. 2.1.2C
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