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1. Goodwill on December 31, 2020 balance sheet. 2. NCINAS.

1. Goodwill on December 31, 2020 balance sheet. 2. NCINAS.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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PROBLEM VI. P Corporation acquired 80% of the outstanding voting stock of S Company for P4,500,000 on January 1, 2020 and paid P50,000 for direct acquisition related costs. On this date, S Company's stockholders' equity is composed of: Share capital P2,000,000 Share premium 1,200,000 Retained earnings 1,600,000 The excess of cost over book value of interest acquired is allocated as follows: 10% to undervalued inventory which is all sold during the year, 40% to undervalued plant assets which has a remaining life of 5 years, and the remainder, to goodwill. SCompany reported net income of P200,000 and paid dividends of P150,000 in 2020. The impairment on goodwill for 2020 was reported to be P5,000. 1. Goodwill on December 31, 2020 balance sheet. 2. NCINAS.
Transcribed Image Text:PROBLEM VI. P Corporation acquired 80% of the outstanding voting stock of S Company for P4,500,000 on January 1, 2020 and paid P50,000 for direct acquisition related costs. On this date, S Company's stockholders' equity is composed of: Share capital P2,000,000 Share premium 1,200,000 Retained earnings 1,600,000 The excess of cost over book value of interest acquired is allocated as follows: 10% to undervalued inventory which is all sold during the year, 40% to undervalued plant assets which has a remaining life of 5 years, and the remainder, to goodwill. SCompany reported net income of P200,000 and paid dividends of P150,000 in 2020. The impairment on goodwill for 2020 was reported to be P5,000. 1. Goodwill on December 31, 2020 balance sheet. 2. NCINAS.
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