England Company assembled the following data relative to ocertain entity in determining the amount to be paid for netassets and goodwill:2,600,000Assets at fair value before goodwillLiabilities1,700,000Shareholders' equityNet earnings after elimination of unusual or infrequent items:200,000230,000300,000250,000270,00020182019thucms20202021Required:Calculate the amount of goodwill under the following:1. Average earnings are capitalized at 10%.2. A return of 8% is considered normal on net assets at farvalue. Excess earnings are capitalized at 15%.3. A return of 10% is considered normal on net assets at fauvalue. Goodwill is measured at 5 years excess earnings.Goodwill is measured by the present value method using12% rate. The present value of an ordinary annuity of12% for 10 years is 5.65.

The question is based on the concept of Financial Accounting. As per the Bartelby guidelines we are…

England Company assembled the following data relative to a certain entity in determining the amount to be paid for net assets and goodwill: 2,600,000 Assets at fair value before goodwill Liabilities 900,000 Shareholders' equity 1,700,000 Net earnings after elimination of unusual or infrequent items:

England Company assembled the following data relative to a certain entity in determining the amount to be paid for net assets and goodwill: 2,600,000 Assets at fair value before goodwill Liabilities 900,000 Shareholders' equity 1,700,000 Net earnings after elimination of unusual or infrequent items:

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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Hello, I'm having issues with the books problem questions. The problem is looking for the "Goodwill" If the method is needed, we've been told to use Fair value method.
Given all the data, in the books of Kingdom Co. this transaction resulted in: a. Goodwill recorded at P1,324,200b. Goodwill recorded at P704,400c. Current Assets increased by P704,400d. Retained Earnings increased by P704,400
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