On January 1, 2022, Tatay, Co. and Walanay, Inc. combined. As of this date, the book values of the assets, liabilities and equity of Tatay and Walanay before the business combination are as follows:

 

Case 1: last year, on July 1, 2021, Tatay, Co. acquired 45% ownership interest in Walanay, Inc. for P 450,000.00. Tatay classified the investment as ‘Held for Trading Securities’ (FVPL). Now, January 1, 2022, Tatay, Co. paid P250,000.00 cash from the bank in exchange for an additional 10% ownership interest in Walanay, Inc. The following relevant Information follows:

a. The previously held interest of Tatay are currently quoted at 20% higher than its book
value.
b. The assets and liabilities of Walanay are all equivalent to their market values.
c. Tatay elected to measure NCI at ‘proportionate share’.

With the stated facts, answer the following:
1. How much is the Consideration Transferred?
a. P 540,000.00
b. P 790,000.00
c. P 700,000.00
d. P 250,000.00
2. How much is the Non-Controlling Interest in the acquiree?
a. P 0.00
b. P 150,000.00
c. P 598,500.00
d. P 769,500.00
3. How much is the Fair Value of the previously held equity interest in the acquiree?
a. P 0.00
b. P 540,000.00
c. P 450,000.00
d. P 500,000.00

 

 

Transcribed Image Text:

TATAY CO. WALANAY, INC. Asset Petty Cash Fund Cash In bank 10,000.00 10,000.00 700,000.00 800,000.00 Receivables 490,000.00 250,000.00 Inventory 500,000.00 150,000.00 Investment held for Trading Securities 450,000.00 Building 1,300,000.00 850,000.00 Goodwill 250,000.00 140,000.00 Total Assets 3,700,000.00 2,200,000.00 Liability and Equity Liabilities 750,000.00 350,000.00 Share Capit al 1,900,000.00 1,000,000.00 Share Premium 650,000.00 530,000.00 Ret ained Earnings 400,000.00 320,000.00 Total Liabilit y and Equity 3,700,000.00 2,200,000.00 TATAY CO. WALANAY, INC. Asset Petty Cash Fund Cash In bank 10,000.00 10,000.00 700,000.00 800,000.00 Receivables 490,000.00 250,000.00 Inventory 500,000.00 150,000.00 Investment held for Trading Securities 450,000.00 Building 1,300,000.00 850,000.00 Goodwill 250,000.00 140,000.00 Total Assets 3,700,000.00 2,200,000.00 Liability and Equity Liabilities 750,000.00 350,000.00 Share Capit al 1,900,000.00 1,000,000.00 Share Premium 650,000.00 530,000.00 Ret ained Earnings 400,000.00 320,000.00 Total Liabilit y and Equity 3,700,000.00 2,200,000.00

Answer rating: 100% (QA)

Answer I The explanation and data interpretation In this question we get the information about the acquisition of WALANAY Inc According to the data th... View the full answer