Meryll Company is negotiating to acquire the net assets LeMans Company. Under the plan, Meryll is willing to pay for goodwill computed by capitalizing at 25% LeMans’ average earnings in excess of the 10% normal return based on appraised value of net assets. This is the same level of income experienced by companies similar to LeMans line of business. LeMans' income for the past three years averaged P3,000,000. LeMans’ assets and liabilities are Book Value Appraised Value Assets excluding goodwill P30,000,000 P39,000,000 Liabilities 10,500,000 10,500,000
Meryll Company is negotiating to acquire the net assets LeMans Company. Under the plan, Meryll is willing to pay for
Book Value Appraised Value
Assets excluding goodwill P30,000,000 P39,000,000
Liabilities 10,500,000 10,500,000
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