ABC Company acquired all of XYZ Corporation's assets and liabilities on June 30, 20X1. XYZ reported assets with a book value of P1,000,000 and liabilities of P550,000. ABC noted that XYZ included the amount P70,000 for an obsolete inventory at the acquisition date that did not appear to have any value. ABC also determined that an old machine previously used by XYZ had a fair value of P150,000 but had not been recorded by XYZ. Except for machinery and equipment, all the other assets and liabilities of XYZ approximated their fair values. In recording the transfer of assets and liabilities in its books, ABC recorded goodwill of P420,000 and paid P1,050,000 to acquire XYZ's net assets. If the book value of XYZ's machinery and equipment was P520,000, what was their fair value? Sk

ABC Company acquired all of XYZ Corporation's assets and liabilities on June 30, 20X1. XYZ reported assets with a book value of P1,000,000 and liabilities of P550,000. ABC noted that XYZ included the amount P70,000 for an obsolete inventory at the acquisition date that did not appear to have any value. ABC also determined that an old machine previously used by XYZ had a fair value of P150,000 but had not been recorded by XYZ. Except for machinery and equipment, all the other assets and liabilities of XYZ approximated their fair values. In recording the transfer of assets and liabilities in its books, ABC recorded goodwill of P420,000 and paid P1,050,000 to acquire XYZ's net assets. If the book value of XYZ's machinery and equipment was P520,000, what was their fair value? Sk

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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ABC Company acquired all of XYZ Corporation's assets and liabilities on June 30, 20X1. XYZ reported assets with a book value of P1,000,000 and liabilities of P550,000. ABC noted that XYZ included the amount P70,000 for an obsolete inventory at the acquisition date that did not appear to have any value. ABC also determined that an old machine previously used by XYZ had a fair value of P150,000 but had not been recorded by XYZ. Except for machinery and equipment, all the other assets and liabilities of XYZ approximated their fair values. In recording the transfer of assets and liabilities in its books, ABC recorded goodwill of P420,000 and paid P1,050,000 to acquire XYZ's net assets. If the book value of XYZ's machinery and equipment was P520,000, what was their fair value? * Your answwer
Tyra Company acquired all of Jay Corporation's assets and liabilities on June 30, 2021. Jay reported assets with a book value of P1,000,000 and liabilities of P550,000. Tyra noted that Jay included the amount P70,000 for an obsolete inventory at the acquisition date that did not appear to have any value. Tyra also determined that an old machine previously used by Jay had a fair value of P150,000 but had not been recorded by Jay. Except for machinery and equipment, all the other assets and liabilities of Jay approximated their fair values. In recording the transfer of assets and liabilities in its books, Tyra recorded a gain of P150,000 and paid P340,000 to acquire Jay's net assets. If the book value of Jay's machinery and equipment was P360,000, what was their fair value?
XYZ Co had the following accounts at the time it was acquired by ABC Inc (see image below). ABC paid P1,400,000 for the net assets of XYZ. It was determined that the fair market value of inventories and PPE were P133,000 and P900,000 respectively. There is an assumed contingent liability arising from past events with a fair value amounting to P10,000 and such amount is considered a reliable measurement. Compute for a) Cost of Acquisition and b) goodwill or gain from acquisition
XYZ Co had the following accounts at the time it was acquired by ABC Inc (see image below). ABC paid P1,400,000 for the net assets of XYZ. It was determined that the fair market value of inventories and PPE were P133,000 and P900,000 respectively. There is an assumed contingent liability arising from past events with a fair value amounting to P10,000 and such amount is considered a reliable measurement. Compute for: a) Cost of Acquisition b) Good will or Gain from acquisition
XYZ Co had the following accounts at the time it was acquired by ABC Inc (see image below). ABC paid P1,400,000 for the net assets of XYZ. It was determined that the fair market value of inventories and PPE were P133,000 and P900,000 respectively. There is an assumed contingent liability arising from past events with a fair value amounting to P10,000 and such amount is considered a reliable measurement. Compute for a) Cost of Acquisition and b) goodwill or gain from acquisition
If the book value of Jay's machinery and equipment was P360,000 what was the fair value?
Niall Company acquired all of Ed Sheeran Corporation's assets and liabilities on June 30, 2021. Ed Sheeran reported assets with a book value of $1,000,000 and liabilities of $550,000. Niall noted that Ed Sheeran included the amount $70,000 for an obsolete inventory at the acquisition date that did not appear to have any value. Niall also determined that an old machine previously used by Ed Sheeran had a fair value of $150,000 but had not been recorded by Ed Sheeran. Except for machinery and equipment, all the other assets and liabilities of Ed Sheeran approximated their fair values. In recording the transfer of assets and liabilities in its books, Niall recorded a gain of $150,000 and paid $340,000 to acquire Ed Sheeran's net assets. If the book value of Ed Sheeran's machinery and equipment was $360,000, what was their fair value?
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ABC Corp. had the following data ascertained before liquidation: Total book valueof the assets were P250,000. The book value of the inventories, P80,000 had anexcess in the amount of P26,000 over its estimated fair value. The equipment’sestimated fair value had an excess in the amount of P2,500 over its book value ofP120,000. Included in the book value of the assets was prepaid expenses of P18,000which was considered worthless. Other assets not mentioned above have anestimated fair value which was P15,000 less than its book value. Total liabilities wereP200,000. The accounts payable in the amount of P70,000 was secured by theinventories while the notes payable in the amount of P95,000 was secured by theequipment. Other liabilities not mentioned includes salaries and taxes in the amountof P12,500.What is the amount of net free assets? a. 32,000 b. 93,000 c. 50,000 d. 44,500