Brisbane Company has recently diversified by taking over the operations ofDarwin Company at a cost of P9,000,000.Darwin Company manufactures and sells a cleaning cloth called the"Superswipe" which was developed by highly trained and innovativeresearch staff.The unique nature of the coating used on the "Superswipe" has resulted inDarwin company acquiring a significant share of the South African market.A recent expansion into the equatorial African market has provedsuccessful.As a result of the takeover, Brisbane Company acquired the following assetsand liabilities at fair value:LandMachineryInventoryAccounts receivable3,500,0002,000,0001,800,000700,000Accounts payable3,000,000In addition, Darwin Company owned, but had not recognized, the following:Trademark - "Superswipe" with fair value of P1,000,000PatentFormula for the special coating with fair value of P500,000-The research staff of Darwin Company agreed to join the staff of BrisbaneCompany and will continue to work on a number of projects aimed atproducing specialized version of the "Superswipe".Required:1. Determine the goodwill arising from the acquisition2. Prepare journal entry to record the acquisition.

The need for determining goodwill often arises when one company buys another firm. Goodwill is…

Brisbane Company has recently diversified by taking over the operations of Darwin Company at a cost of P9,000,000. Darwin Company manufactures and sells a cleaning cloth called the "Superswipe" which was developed by highly trained and innovative research staff. The unique nature of the coating used on the "Superswipe" has resulted in Darwin company acquiring a significant share of the South African market. A recent expansion into the equatorial African market has proved successful. As a result of the takeover, Brisbane Company acquired the following assets and liabilities at fair value: Land 3,500,000 Machinery Inventory Accounts receivable 2,000,000 1,800,000 700,000 Accounts payable 3,000,000 In addition. Darwin Company owned, but had not recognized, the following:

Brisbane Company has recently diversified by taking over the operations of Darwin Company at a cost of P9,000,000. Darwin Company manufactures and sells a cleaning cloth called the "Superswipe" which was developed by highly trained and innovative research staff. The unique nature of the coating used on the "Superswipe" has resulted in Darwin company acquiring a significant share of the South African market. A recent expansion into the equatorial African market has proved successful. As a result of the takeover, Brisbane Company acquired the following assets and liabilities at fair value: Land 3,500,000 Machinery Inventory Accounts receivable 2,000,000 1,800,000 700,000 Accounts payable 3,000,000 In addition. Darwin Company owned, but had not recognized, the following:

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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