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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.

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.

FINANCIAL ACCOUNTING
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.

Presto Corboration purchased a 10% interest in Hersheys Company on January 2, 2014, as an available for sale investment for a price of P160,000. On January 2, 2019, Presto Corporation purchases 14,000 additional shares of Hersheys Company from existing shareholders for P1,260,000. The purchase raised Presto's interest to 80%. Hersheys Company the following statement of financial position just prior to Presto's second purchase: Assets Liabilities and Equity Current assets 660,000 Liabilities 260,000 Building (net) Equipment (net) 560,000 Common stock, P20 par 400,000 Retained earnings 1,620,000 Total liabilities and equity 400,000 960,000 Total assets 1,620,000 On the date of the second purchase, Presto determines that Hersheys' equipment was undervalued by P200,000 and had a 5-year remaining life. All other book values approximate fair values. Any remaining excess is attributed to goodwill.
Transcribed Image Text:Presto Corboration purchased a 10% interest in Hersheys Company on January 2, 2014, as an available for sale investment for a price of P160,000. On January 2, 2019, Presto Corporation purchases 14,000 additional shares of Hersheys Company from existing shareholders for P1,260,000. The purchase raised Presto's interest to 80%. Hersheys Company the following statement of financial position just prior to Presto's second purchase: Assets Liabilities and Equity Current assets 660,000 Liabilities 260,000 Building (net) Equipment (net) 560,000 Common stock, P20 par 400,000 Retained earnings 1,620,000 Total liabilities and equity 400,000 960,000 Total assets 1,620,000 On the date of the second purchase, Presto determines that Hersheys' equipment was undervalued by P200,000 and had a 5-year remaining life. All other book values approximate fair values. Any remaining excess is attributed to goodwill.
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