On January 22, 2022, LUNA Inc. acquired 75% of the outstanding voting shares of DESIREE Corp....

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On January 22, 2022, LUNA Inc. acquired 75% of the outstanding voting shares of DESIREE Corp. Immediately before the business combination, the separate books of LUNA and DESIREE had the following information: LUNA DESIREE Cash Receivables Inventory PPE, net Intangible assets, net P 12,500,000 P 625,000 3,750,000 5,000,000 750,000 562,500 17,500,000 $1,500,000 3,125,000 312,500 Good will 1,250,000 Short-term liabilities 6,250,000 875,000 Long-term liabilities 15,000,000 875,000 Ordinary shares (P10 par) 7,500,000 1,250,000 Share premium 6,875,000 250,000 Retained Earnings 7,500,000 625,000 Other relevant information on the date of acquisition: an allowance for doubtful accounts was determined to be set up in the amount of P625,000 for LUNA and P125,000 for DESIREE. The PPE of LUNA is understated by P1,250,000, while the book value of the PPE of DESIREE is higher than its fair value by P250,0000. 1. Assume that LUNA paid P1,625,000 cash to acquire the shares, that fair value of the non- controlling interest is P500,000, and that the full goodwill method was opted for, how much is the consolidated assets on the date of acquisition? Assume that LUNA paid P1,281,250 cash to acquire the shares, inclusive of P156,250 control premium, and that the full goodwill method was opted for, how much should the measurement of non-controlling interest be at the date of acquisition? On January 22, 2022, LUNA Inc. acquired 75% of the outstanding voting shares of DESIREE Corp. Immediately before the business combination, the separate books of LUNA and DESIREE had the following information: LUNA DESIREE Cash Receivables Inventory PPE, net Intangible assets, net P 12,500,000 P 625,000 3,750,000 5,000,000 750,000 562,500 17,500,000 $1,500,000 3,125,000 312,500 Good will 1,250,000 Short-term liabilities 6,250,000 875,000 Long-term liabilities 15,000,000 875,000 Ordinary shares (P10 par) 7,500,000 1,250,000 Share premium 6,875,000 250,000 Retained Earnings 7,500,000 625,000 Other relevant information on the date of acquisition: an allowance for doubtful accounts was determined to be set up in the amount of P625,000 for LUNA and P125,000 for DESIREE. The PPE of LUNA is understated by P1,250,000, while the book value of the PPE of DESIREE is higher than its fair value by P250,0000. 1. Assume that LUNA paid P1,625,000 cash to acquire the shares, that fair value of the non- controlling interest is P500,000, and that the full goodwill method was opted for, how much is the consolidated assets on the date of acquisition? Assume that LUNA paid P1,281,250 cash to acquire the shares, inclusive of P156,250 control premium, and that the full goodwill method was opted for, how much should the measurement of non-controlling interest be at the date of acquisition?

Answer rating: 100% (QA)

To calculate the consolidated assets on the date of acquisition we need to follow these steps 1 Dete... View the full answer