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    Date of Acquisition Exercises

    Uploaded by

    Meleen Tadena
    The document contains 4 problems related to business combinations and consolidations. Problem 1 provides financial information for Lancer Corporation and its acquisition by Krista Corporation. It asks to calculate non-controlling interest and goodwill/gain using two different methods for valuing NCI. Problem 2 provides information about Major Corporation acquiring 80% of Minor Corporation and asks to calculate goodwill and non-controlling interest. Problem 3 gives additional details about Lancer Corporation's acquisition and asks to calculate goodwill/gain under different scenarios. Problem 4 provides financial details of Baguio Company's acquisition of shares in San Fernando Company and asks to calculate non-controlling interest and goodwill using two methods for valuing NCI.

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    Date of Acquisition Exercises

    Uploaded by

    Meleen Tadena
    141 views2 pages
    The document contains 4 problems related to business combinations and consolidations. Problem 1 provides financial information for Lancer Corporation and its acquisition by Krista Corporation. It asks to calculate non-controlling interest and goodwill/gain using two different methods for valuing NCI. Problem 2 provides information about Major Corporation acquiring 80% of Minor Corporation and asks to calculate goodwill and non-controlling interest. Problem 3 gives additional details about Lancer Corporation's acquisition and asks to calculate goodwill/gain under different scenarios. Problem 4 provides financial details of Baguio Company's acquisition of shares in San Fernando Company and asks to calculate non-controlling interest and goodwill using two methods for valuing NCI.

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    date_of_acquisition_exercises

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    The document contains 4 problems related to business combinations and consolidations. Problem 1 provides financial information for Lancer Corporation and its acquisition by Krista Corporation. It asks to calculate non-controlling interest and goodwill/gain using two different methods for valuing NCI. Problem 2 provides information about Major Corporation acquiring 80% of Minor Corporation and asks to calculate goodwill and non-controlling interest. Problem 3 gives additional details about Lancer Corporation's acquisition and asks to calculate goodwill/gain under different scenarios. Problem 4 provides financial details of Baguio Company's acquisition of shares in San Fernando Company and asks to calculate non-controlling interest and goodwill using two methods for valuing NCI.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    141 views2 pages

    Date of Acquisition Exercises

    Uploaded by

    Meleen Tadena
    The document contains 4 problems related to business combinations and consolidations. Problem 1 provides financial information for Lancer Corporation and its acquisition by Krista Corporation. It asks to calculate non-controlling interest and goodwill/gain using two different methods for valuing NCI. Problem 2 provides information about Major Corporation acquiring 80% of Minor Corporation and asks to calculate goodwill and non-controlling interest. Problem 3 gives additional details about Lancer Corporation's acquisition and asks to calculate goodwill/gain under different scenarios. Problem 4 provides financial details of Baguio Company's acquisition of shares in San Fernando Company and asks to calculate non-controlling interest and goodwill using two methods for valuing NCI.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    PROBLEM 1

    The statemet of financial Position of Lancer Corporation on June 30, 2013 is presented
    below:
    Current Assets 32,500
    Land 220,000
    Building 110,000
    Equipment 87,500
    Total Assets 450,000
    Liabilities 87,500
    Capital stock, P5 par 150,000
    Additional paid in capital 137,500
    Retained earnings 75,000
    Total Equities P450,000
    All the assets and liabilities of Lancer assumed to approximate their fair values except
    for land and building. It is estimated that the land have a fair value of P350,000 and the fair
    value of the building increased by P80,000. Krista Corporation acquired 80% of Lancer’s capital
    stock for P500,000. The fair value of non-controlling interest was 130,000 on June 30, 2013.
    Determine the following

    a. Non-Controlling Interest and Goodwill/ Gain arising from the business


    combination if NCI is to be valued using the proportionate basis. ( Partial)
    b. Non-Controlling Interest and Goodwill/Gain arising from the business
    combination if NCI is to be valued at the NCI shares Fair Value. ( Full)

    PROBLEM 2
    Minor Corporation reports net assets of P300,000 at book value. These assets have an
    estimated market value of P350,000. If Major Corporation buys 80 percent ownership of Minor
    for P275,000,

    a. Goodwill will be reported in the consolidated balance sheet in the amount of:
    b. The non-controlling interest will be reported in the amount of:

    PROBLEM 3
    The statemet of financial Position of Lancer Corporation on June 30, 2013 is presented below:
    Curremt Assets 32,500
    Land 220,000
    Building 110,000
    Equipment 87,500
    Total Assets 450,000
    Liabilities 87,500
    Capital stock, P5 par 150,000
    Additional paid in capital 137,500
    Retained earnings 75,000
    Total Equities P450,000
    All the assets and liabilities of Lancer assumed to approximate their fair values except for land
    and building. It is estimated that the land have a fair value of P350,000 and the fair value of the
    building increased by P80,000.
    Krista Corporation acquired 80% of Lancer’s capital stock for P500,000.

    Required
    1. Assuming the consideration paid includes control premium of P142,00, how much is the
    goodwill/(gain on acquisition) on the consolidated financial statement?
    2. Assuming the consideration paid excludes control premium goodwill/(gain on
    acquisition) on the consolidated financial statement?
    3. Assuming the consideration paid includes control premium of P37,000, how much is the
    goodwill/(gain on acquisition) on the consolidated financial statement?

    Problem 4
    Baguio Company acquires 15% of San Fernando company’s ordinary shares for P5,000,000 cash
    and carries the investment using the cost the cost method. A few months later, Baguio purchases
    another 60% of San Fernando’s ordinary shares for P2,160,000. At that date, San Fernando
    company reports identifiable assets with a book value of P3,900,000 a fair value of P5,100,00
    and it has liabilities with a book value of and fair value of P1,900,000. The fair value of the 25%
    non-controlling interest in San Fernando company is P900,000.
    Determine the:
    a. Non-Controlling Interest and Goodwill/ Gain arising from the business combination if
    NCI is to be valued using the proportionate basis. ( Partial)
    b. Non-Controlling Interest and Goodwill/Gain arising from the business combination if
    NCI is to be valued at the NCI shares Fair Value. ( Full)

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