another entity when the statement of financial position ofamount of assets and liabilities:the acquiree showed net assets of P3,200,000.P4,000,000 cash all of the outstanding ordinary shares ofAt the current year-end, Clever Company purchased foranother entity when the statement of financial position ofthe acquiree showed net assets of P3,200,000.The acquiree revealed the following fair value and carryingCarrying amountFair valueProperty, plant and equipment, netOther assetsLong-term debt5,000,000500,0003,000,0005,750,0002,800,000As a result of the trànsaction, what amount should bereported as goodwill at year-end?a. 350,000b. 250,000c. 750,000d. 800,000

Fair value of net identifiable assets = Carrying amount of net assets ± Fair value changes…

amount of assets and liabilities: another entity when the statement of financial position of P4,000,000 cash all of the outstanding ordinary shares of At the current year-end, Clever Company purchased for the acquiree showed net assets of P3,200,000. other entity when the statement of financial position of he acquiree showed net assets of P3,200,000. The acquiree revealed the following fair value and carrying Carrying amount Fair value Property, plant and equipment, net Other assets Long-term debt 5,000,000 500,000 3,000,000 5,750,000 2,800,000 As a result of the trànsaction, what amount should be reported as goodwill at year-end? a. 350,000 b. 250,000 c. 750,000 d. 800,000

amount of assets and liabilities: another entity when the statement of financial position of P4,000,000 cash all of the outstanding ordinary shares of At the current year-end, Clever Company purchased for the acquiree showed net assets of P3,200,000. other entity when the statement of financial position of he acquiree showed net assets of P3,200,000. The acquiree revealed the following fair value and carrying Carrying amount Fair value Property, plant and equipment, net Other assets Long-term debt 5,000,000 500,000 3,000,000 5,750,000 2,800,000 As a result of the trànsaction, what amount should be reported as goodwill at year-end? a. 350,000 b. 250,000 c. 750,000 d. 800,000

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 Co. engaged your services to compute the goodwill and purchase price for the acquisition of XYZ Corp. The following data are available for XYZ Corp.: 6,000,000 Current Liabilities 2,500,000 Non-current liabilities Property, Plant and Equipment 13,000,000 Ordinary shares Share Premium 3,500,000 2,500,000 7,000,000 1,500,000 7,000,000 21,500,000 Total Liabilities and Equity 21,500,000 Current Asset Investments Accumulated Profits Total Assets You found out that the investments have a fair value of P2,000,000 and the current assets and property, plant and equipment are understated by P800,000 and P1,850,000 respectively. All other assets and equities are properly stated. An examination of the company's income for the last 4 years revealed that the total earnings amounted to P9,000,000. The said earnings include gain on sale during the last year of P100,000 and P150,000 annual bonus of the president. The normal rate of return is 10%. Compute for the goodwill (purchase of goodwill for 4…
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