On the date of the second purchase. CPA determines that the equipment of Sticky was understated by P150,000 and had a 5-year remaining life. All other book values approximate fair values. Any remaining excess is attributed to goodwill.On January 1, 2015 consolidated statement of financial position, what is the amount of goodwill to be reported? CPA Corporation purchased a 10% interest in Sticky Company on January 1, 2010 as an available-for-saleinvestment for a price of P120,000. On January 1, 2015, CPA Corporation purchases 7,000 additional sharesof Sticky Company from existing stockholders for P945,000. The purchase increased CPA's interest to 70%.Sticky Company Had the following statement of financial position just prior to CPA's second purchase:AssetsLiabilities and EquityCurrent assetsLiabilitiesBuildings (net)Common stock, P30 parEquipment (net)Retained earningsTotal assetsTotal liabilities and equityP495,000420,000300,000P1,215,000P195,000300,000720,000P1,215,000

As per the given information: Interest purchased in Sticky company on January 1,2010- 10% for…

Answered: CPA Corporation purchased a 10%…

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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On the date of the second purchase. CPA determines that the equipment of Sticky was understated by P150,000 and had a 5-year remaining life. All other book values approximate fair values. Any remaining excess is attributed to goodwill.

On January 1, 2015 consolidated statement of financial position, what is the amount of goodwill to be reported?

CPA Corporation purchased a 10% interest in Sticky Company on January 1, 2010 as an available-for-sale
investment for a price of P120,000. On January 1, 2015, CPA Corporation purchases 7,000 additional shares
of Sticky Company from existing stockholders for P945,000. The purchase increased CPA's interest to 70%.
Sticky Company Had the following statement of financial position just prior to CPA's second purchase:
Assets
Liabilities and Equity
Current assets
Liabilities
Buildings (net)
Common stock, P30 par
Equipment (net)
Retained earnings
Total assets
Total liabilities and equity
P495,000
420,000
300,000
P1,215,000
P195,000
300,000
720,000
P1,215,000

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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