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14.Liliw Company engaged your services to compute the goodwill in the purchase of Calauan Company which provided the following: Net income Net assets 1,400,000 1,600,000 2,000,000 2002 6,000,000 8,000,000 8,800,000 2003 2004 2005 2,200,000 9,200,000 It is agreed that goodwill is measured by capitalizing excess earnings at 20% with normal return on average net assets at 10%. How much is the purchase price for Calauan Company? a. P14,200,000 b. P18.200.000 c. P13,000,000 d. P17.000.000

14.Liliw Company engaged your services to compute the goodwill in the purchase of Calauan Company which provided the following: Net income Net assets 1,400,000 1,600,000 2,000,000 2002 6,000,000 8,000,000 8,800,000 2003 2004 2005 2,200,000 9,200,000 It is agreed that goodwill is measured by capitalizing excess earnings at 20% with normal return on average net assets at 10%. How much is the purchase price for Calauan Company? a. P14,200,000 b. P18.200.000 c. P13,000,000 d. P17.000.000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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14.Liliw Company engaged your services to compute the goodwill in the purchase of Calauan Company which provided the following: Net income Net assets 2002 1,400,000 1,600,000 2,000,000 6,000,000 8,000,000 8,800,000 2003 2004 2005 2,200,000 9,200,000 It is agreed that goodwill is measured by capitalizing excess earnings at 20% with normal return on average net assets at 10%. How much is the purchase price for Calauan Company? a. P14,200,000 b. P18,200,000 c. P13,000,000 d. P17,000,000
Transcribed Image Text:14.Liliw Company engaged your services to compute the goodwill in the purchase of Calauan Company which provided the following: Net income Net assets 2002 1,400,000 1,600,000 2,000,000 6,000,000 8,000,000 8,800,000 2003 2004 2005 2,200,000 9,200,000 It is agreed that goodwill is measured by capitalizing excess earnings at 20% with normal return on average net assets at 10%. How much is the purchase price for Calauan Company? a. P14,200,000 b. P18,200,000 c. P13,000,000 d. P17,000,000
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