On January 1, 2019, EXO Corp. purchased BTS Inc. at a cost that resulted in recognition of goodwill at P10,000,000 having an expected benefit period of 10 years. During the first half of 2019, EXO Corp. spent an additional P2,000,000 on expenditures designed to maintain goodwill. Due to these expenditures, on December 31, 2019, EXO Corp. estimated that the benefit period of goodwill was indefinite. In its December 31, 2019 statement of financial position, what amount should EXO Corp report as goodwill?
On January 1, 2019, EXO Corp. purchased BTS Inc. at a cost that resulted in recognition of goodwill at P10,000,000 having an expected benefit period of 10 years. During the first half of 2019, EXO Corp. spent an additional P2,000,000 on expenditures designed to maintain goodwill. Due to these expenditures, on December 31, 2019, EXO Corp. estimated that the benefit period of goodwill was indefinite. In its December 31, 2019 statement of financial position, what amount should EXO Corp report as goodwill?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On January 1, 2019, EXO Corp. purchased BTS Inc. at a cost that
resulted in recognition of
10 years. During the first half of 2019, EXO Corp. spent an additional
P2,000,000 on expenditures designed to maintain goodwill. Due to these expenditures,
on December 31, 2019, EXO Corp. estimated that the benefit period of goodwill
was indefinite.
In its December 31, 2019 statement of financial position, what amount should
EXO Corp report as goodwill?
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