~Messenger ACA 321A / AMA 321: Activity Ch x Microsoft Word - Activity Ch1-2 x + X C O File | C:/Users/acer/Downloads/Activity%20Ch1-2.pdf :: Apps New folder Other bookmarks Microsoft Word - Activity Ch1-2 1 Business Combination Activity Ch1-2 Problem: On January 2, 2019, AB Corp. purchased 80% of the outstanding ordinary shares of XY Company for P2, 100,000 payable in cash. On that date, the assets and liabilities of XY Company had fair market values as indicated below. Statements of Financial Position of the companies on January 2, 2019 are also indicated below. The non-controlling interest is measured at fair value. XY AB Book Value Fair Value Assets Cash P262,500 P262,500 P262,500 Receivables 525,000 393,750 393,750 Inventories 393,750 341,250 367,500 Land 131,250 210,000 315,000 Building - net 787,500 25,000 472,500 Long-term investment in MS 262,500 328, 125 367,500 Investment in XY Co 2,100,000 Total P4,462,500 P2,060,625 Liab and SHE Accounts payable P1,136,625 P301,875 301,875 Ordinary shares - AB Co 1,050,000 Ordinary shares - XY Co. 525,000 APIC - AB 525,000 Retained earnings - AB Co. ,750,875 Retained earnings - XY Co. 1,233,750 Total P4,462,500 P2,060,625 Required: Assuming the following information instead of the original values for the given below: Price paid Interest Liabilities of AB FMV of NCI A. P1,890,000 90% P926,625 P236,250 B . + P2,362,500 75% P1,399, 125 P393,750 1. Prepare journal entries on the books of AB Company. 2. Determine the amount of goodwill or income from acquisition. 3. Prepare working paper entries