Problem 2 Uste Corporation acquired on January 1, 2024, 60% of the outstanding share capital of PSBA Company for P1,800,

[answerhappygod]

Problem 2
Uste Corporation acquired on January 1, 2024, 60% of theoutstanding share capital of PSBA Company for P1,800,000. At thatdate, the equity of PSBA Co. comprised of Ordinary share capital ofP500,000 and Retained earnings of P1,500,000. The book value of thenet assets is equal to fair value except for the equipment with aP100,000 excess of fair value over book value and estimatedremaining life of 10 years. Uste Corporation elects to measurenon-controlling interest at its proportionate share of PSBACompany’s identifiable net assets.
The profit after tax of PSBA Cmpany. for the year ended December31, 2014 was P1,000,000 and the retained earnings at that date wereP2,500,000.
3. How much is the non-controlling interest for purposes ofcomputing goodwill?
4. How much is the goodwill?
5. Using the fair value method, how much is the non-controllinginterest for purposes of
computing goodwill?