Azucena Co, acquired all the assets and liabilities of Golf Co. for P2,600,000. On acquisition date, Golf's identifiable assets and liabilities have fair values of P5,900,000 and P3,500,000 respectively. Relevant information follows: a. Azucena is renting out a building to Golf Co, on an operating lease. The terms of the lease compared with market terms are favorable. The fair values of the differential is P90,000. b. Golf is a defendant on a pending lawsuit. No provision was recognized because Azucena's legal counsel believes they will successfully defend the case. The fair value of settling the lawsuit is P10,000. How much is the goodwill (gain on bargain purchase)?

Azucena Co, acquired all the assets and liabilities of Golf Co. for P2,600,000. On acquisition date, Golf's identifiable assets and liabilities have fair values of P5,900,000 and P3,500,000 respectively. Relevant information follows: a. Azucena is renting out a building to Golf Co, on an operating lease. The terms of the lease compared with market terms are favorable. The fair values of the differential is P90,000. b. Golf is a defendant on a pending lawsuit. No provision was recognized because Azucena's legal counsel believes they will successfully defend the case. The fair value of settling the lawsuit is P10,000. How much is the goodwill (gain on bargain purchase)?

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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