How much is the goodwill (gain on a bargain purchase)? Transcribed Image Text: On January 1, 20×1, ABC Co. acquired 75% interest in XYZ, Inc. for P2,500,000 cash. ABC Co.

How much is the goodwill (gain on a bargain purchase)? Transcribed Image Text: On January 1, 20×1, ABC Co. acquired 75% interest in XYZ, Inc. for P2,500,000 cash. ABC Co. incurred transaction costs of P250,000 for
legal, accounting and consultancy fees in negotiating the business combination. ABC Co. elected to measure NCI at the NCI’s
proportionate share in XYZ, Inc.’s identifiable net assets. The carrying amounts and fair values of XYZ’s assets and liabilities at the
acquisition date were as follows:
Carrying amounts
Fair values
Assets
Cash in bank
25,000
25,000
Accounts receivable
425,000
300,000
Inventory
1,300,000
875,000
Equipment – net
2,500,000
2,750,000
Goodwill
250,000
50,000
4,000,000
Total assets
4,500,000
Liabilities
Payables
1,000,000
1,000,000
How much is the goodwill (gain on a bargain purchase)?