Show the solution in good accounting form 8. CARNATION Company purchased an entity for P6,000,000 cash on2 poimJanuary 31. The book value and fair value of the assets of the acquiredentity as of the date of acquisition follow: *Book ValueFair ValueCash50,000 P500,0001,000,00050,000500,0001,500,000250,0003,000,000Accounts receivableInventoryPatentProperty, plant and equipment2,000,000In addition, the acquired entity had liabilities totaling P2,000,000 at the time of theacquisition. The acquired entity has no other separately identifiable intangible assets.What is the goodwill arising from the acquisition?O P 4,450,000O P 700,000P 2,450,000O P 2,700,000

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Description: Show the solution in good accounting form 8. CARNATION Company purchased an entity for P6,000,000 cash on2 poimJanuary 31. The book value and fair value of the assets of the acquiredentity as of the date of acquisition follow: *Book ValueFair ValueCa

Goodwill is the amount paid over the fair value of the net asset acquired.

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8. CARNATION Company purchased an entity for P6,000,000 cash on 2 poi January 31. The book value and fair value of the assets of the acquired entity as of the date of acquisition follow: * Book Value Fair Value Cash 50,000 P 50,000 500,000 1,500,000 250,000 3,000,000 Accounts receivable 500,000 Inventory 1,000,000 Patent Property, plant and equipment 2,000,000 • In addition, the acquired entity had liabilities totaling P2,000,000 at the time of the acquisition. The acquired entity has no other separately identifiable intangible assets. What is the goodwill arising from the acquisition? O P 4,450,000 O P 700,000 O P 2,450,000 O P 2,700,000

8. CARNATION Company purchased an entity for P6,000,000 cash on 2 poi January 31. The book value and fair value of the assets of the acquired entity as of the date of acquisition follow: * Book Value Fair Value Cash 50,000 P 50,000 500,000 1,500,000 250,000 3,000,000 Accounts receivable 500,000 Inventory 1,000,000 Patent Property, plant and equipment 2,000,000 • In addition, the acquired entity had liabilities totaling P2,000,000 at the time of the acquisition. The acquired entity has no other separately identifiable intangible assets. What is the goodwill arising from the acquisition? O P 4,450,000 O P 700,000 O P 2,450,000 O P 2,700,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 9MC

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Show the solution in good accounting form Coronation company purchased an entity for 6,000,000 cash on January 31. The book value and fair value of the assets of the acquired entity as of the date of acquisition of follow: Question: What is the good arising from the acquisition? A. 4,450,000 B. 700,000 C. 2,450,000 D. 2,700,000
1. The Judi Company purchased another entity for P8,000,000 cash. A schedule of the fair value of the acquired entity's assets and liabilities is prepared as of the purchase date. Cash Accounts Receivable Inventory Property, plant and equipment 6,550,000 Accounts payable Notes Payable - Bank (long-term) 1,950,000 Net assets at fair value 100,000 850,000 1,300,000 4,300,000 950,000 1,000,000 4,600,000 Compute for the amount of goodwill using residual approach. a. P 1,450,000 b. 3,400,000 c. P 4,600,000 d. P 2,900,000
Please explain how 820 000 derive.
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Illu.1 : A Ltd. acquired B Ltd. Business with the following values. Rs. Fixed Asets 3,00,000 1,00,000 50,000 Current assets Debentures Current Liabilities 1,00,000 Calculate purchase consideration. CS Scanned with CamScanner
2. ABC Company purchased an entity for $6,500,000 cash at the beginning of the current year. The carrying amount and fair value of the assets of the acquired entity on the date of acquisition are: Carrying Amount Fair Value 50,000 50,000 Cash Accounts Receivable Inventory Patent Property, plant and equipment 3,000,000 600,000 1,000,000 30,000 2,000,000 600,000 1,500,000 200,000 In Addition, the acquired entity had accounts payable only totaling P500,000 at the time of acquisition. The acquired entity has no other separately identifiable intangible assets. Compute for the amount of goodwill using residual approach. a. P 2,700,000 b. P 2,820,000 c. P 2,320,000 d. P 1,650,000
High Company purchased for cash at P5,0 per share ll 150,000 ordinary shares outstanding of another entity. The statement of financial position of the acquiree on the date of acquisition showed net assets with a carrying amount of P6,000,000. The fair value of property, plant, and equipment on same date was P800,000 in excess of carrying amount. What amount should be recorded as goodwill on the date of purchase? a. 1,500,000 b. 800,000 700,000 d. с.
Topic: Non-Current Assets Held for Sale and Discontinued Operations 15. Which of the following shall be recognized by the entity in its 20x3 financial statements? Held for ale asset Impairment loss a. P1,100,000 P450,000 b. P1,000,000 P350,000 c. P750,000 P250,000 d. P0 P350,000 16. Requirement: Provide the journal entry on December 31, 20x3.
5. How should accounting fees for acquisition be treated? A. Expensed in the period of acquisition B. Capitalized as part of acquisition cost C. Deferred and amortized D. Deferred until the company is disposed of or wound-up 6.The excess of the price paid over the fair value of the net identifiable assets acquired should be recognized as A. Goodwill to be amortized periodically for 20 yearS. B. Expenses immediately C. Goodwill not subject to amortization but subject to impairment D. Goodwill to be amortized for 40 years 7.Under PFRS 3 (Business Combinations) A. Both direct and indirect costs are to be capitalized B. Both direct and indirect costs are to be expensed C. Direct costs are to be capitalized and indirect costs are to be expensed D. Indirect costs are to be capitalized and direct costs are to be expensed
Topic: Non-Current Assets Held for Sale and Discontinued Operations 13. Which of the following shall be recognized by the entity in its 20x2 financial statements? Held for ale asset Impairment loss a. P700,000 P100,000 b. P650,000 P100,000 c. P650,000 P150,000 d. P0 P100,000 13. Requirement: Provide the journal entry on December 31, 20x2.
7. What is the amount of revaluation surplus on December 31, 2021? A. 600,000 B. 700,000 C. 800,000 D. 0 E. None of them
Preston Company acquired the assets (except for cash) and assumed the liabilities of Saville Company. Immediately prior to the acquisition, Saville Company’s balance sheet was as follows: Book Value Fair Value Cash $122,900 $122,900 Receivables (net) 207,560 232,240 Inventory 361,510 389,840 Plant and equipment (net) 459,200 573,420 Land 417,050 617,650 Total assets $1,568,220 $1,936,050 Current Liabilities $526,250 $596,650 Common stock ($5 par value) 477,680 Other contributed capital 126,920 Retained earnings 437,370 Total equities $1,568,220 (a) Prepare the journal entries on the books of Preston Company to record the purchase of the assets and assumption of the liabilities of Saville Company if the amount paid was $1,567,060 in cash. (If no entry is required, select "No Entry" for the account titles and enter 0 for the…