MEC57 – PRACTICE SET 3 - SDOA

Submit on Tuesday, 10am

Problem 1: On January 2,2030, Peter Inc. acquired 80% interest in Sally Co. by paying ₱ 1,000,000
cash. Sally Co’s fair value of net identifiable assets on that date were ₱ 1,200,000. Peter opted to
measure the non-controlling interest at its proportionate share in Sally’s net identifiable assets.

On December 31,2030, Sally reported net income of ₱400,000 and declared dividends amounting to
₱100,000. On January 5,2031, Peter sold 10% interest in Sally Co. for ₱250,000.

Compute for goodwill or gain on bargain purchase.

Problem 2:
On January 1,2030, Paul Corp. acquired 80% interest in Sam Co. for ₱800,000 when the carrying amount
of the net identifiable assets were equal to fair value of the net identifiable assets amounting to
₱600,000. Paul Corp. opted to measure the non-controlling interest at fair value ₱200,000. On December
31,2030, Sam Co. acquired 60% of the outstanding shares of Joey Inc. for ₱300,000 when carrying amount
of the net identifiable assets were equal to fair value of the net identifiable assets amounting to
₱350,000. Sam opted to measure the non-controlling interest at fair value of ₱200,000. On December
31,2030, the group determined that the goodwill to Sam Co. has been impaired by ₱20,000.

On December 31,2030, Paul; Sam and Joey reported net income from their own operations of ₱500,000;
₱200,000 and ₱120,000, respectively.

Req. 1: What is the total goodwill to be reported by Paul in the consolidated financial statements on
December 31,2030?

Problem 3:
On January 1,2030, Paul Corp. acquired 80% interest n Sam Co. for ₱800,000 when carrying amount of
the net identifiable assets were equal to fair value of the net identifiable assets amounting to
₱600,000. Paul Corp. opted to measure the non-controlling interest at fair value of ₱200,000. On
December 31,2030, Sam Co. acquired 60% pf the outstanding shares of Joey Inc. for ₱300,000 when the
carrying amount of the identifiable assets were equal to fair value of the net identifiable assets
amounting to ₱350,000. Sam opted to measure the non-controlling interest at fair value of ₱200,000.
On the December 31,2030, the group determined that the goodwill to Sam Co. has been impaired by
₱20,000.

On December 31,2030, Paul; Sam and Joey reported net income from their own operations of ₱500,000;
₱200,000 and ₱120,000, respectively.

Req.1: What is the total goodwill to be reported by Paul in the consolidated financial statements on
December 31,2030?