Atlas Corp is contemplating acquiring Miya Inc. Relevant information follows: ● Miya's average annual earnings in the past 5 years were P540,000 ● Miya's net assets as the current year-end have a fair value of P5,000,000 ● The industry average rate of return on equity is 10% ● The probable duration of Miya's “excess earnings" is 5 years. If goodwill is measured by capitalizing the average excess earnings at 20%. How much is the goodwill?

Atlas Corp is contemplating acquiring Miya Inc. Relevant information follows: ● Miya's average annual earnings in the past 5 years were P540,000 ● Miya's net assets as the current year-end have a fair value of P5,000,000 ● The industry average rate of return on equity is 10% ● The probable duration of Miya's “excess earnings" is 5 years. If goodwill is measured by capitalizing the average excess earnings at 20%. How much is the goodwill?

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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