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 The Alhambra Company had these accounts at the time it was acquired by Kingdom Co.:CashP 108,000Accounts Receivable1,371,000Inventories360,000PPE1,948,200Accounts Payable1,052,400Kingdom Co. paid P4,200,000 for net assets of Alhambra Company. It has determined the fair market valuesof investment and PPE were P399,000 and P2,700,000, respectively.An assumed contingent liability arising from past events with a fair value amounting to P30,000 and suchamount is considered a reliable measurement.In the books of Kingdom Co., this transaction resulted in:

Given: The books of kingdom Co transaction resulted as follows, Goodwill recorded at P1,324,200b.…

Given all the data, in the books of Kingdom Co. this transaction resulted in: a. Goodwill recorded at P1,324,200 b. Goodwill recorded at P704,400 c. Current Assets increased by P704,400 d. Retained Earnings increased by P704,400

Given all the data, in the books of Kingdom Co. this transaction resulted in: a. Goodwill recorded at P1,324,200 b. Goodwill recorded at P704,400 c. Current Assets increased by P704,400 d. Retained Earnings increased by P704,400

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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Question

Given all the data, in the books of Kingdom Co. this transaction resulted in:

a. Goodwill recorded at P1,324,200
b. Goodwill recorded at P704,400
c. Current Assets increased by P704,400
d. Retained Earnings increased by P704,400

The Alhambra Company had these accounts at the time it was acquired by Kingdom Co.:
Cash
P 108,000
Accounts Receivable
1,371,000
Inventories
360,000
PPE
1,948,200
Accounts Payable
1,052,400
Kingdom Co. paid P4,200,000 for net assets of Alhambra Company. It has determined the fair market values
of investment and PPE were P399,000 and P2,700,000, respectively.
An assumed contingent liability arising from past events with a fair value amounting to P30,000 and such
amount is considered a reliable measurement.
In the books of Kingdom Co., this transaction resulted in:

Definition Definition Intangible asset that includes proprietary or intellectual property and brand value of a firm. Goodwill is recorded in the books when a firm purchases another firm and the purchase price is more than the fair value of net identifiable assets of the acquired business. The amount of goodwill is recorded on the asset side of the balance sheet (statement of financial position).

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