On October 1, 2021, ABC acquired the net assets of DEF which resulted to goodwill. When ABC issued its December 31. 2021. financial statements. the valuation of an acquired trademark was incomplete. ABC used P10,000,000 as provisional fair value of trademarks and determined a 5-year amortization life. ABC appropriately disclosed in its December 31, 2021 tinancial statements that the trademark was measured at a provisional amount. On April 30, 2022, the valuation of the trademark was finalized. The fair value of the acquisition date amounted to P212,000,000. Compute fpr the increase or (decrease) of the Goodwill in December 31, 2022

On October 1, 2021, ABC acquired the net assets of DEF which resulted to goodwill. When ABC issued its December 31. 2021. financial statements. the valuation of an acquired trademark was incomplete. ABC used P10,000,000 as provisional fair value of trademarks and determined a 5-year amortization life. ABC appropriately disclosed in its December 31, 2021 tinancial statements that the trademark was measured at a provisional amount. On April 30, 2022, the valuation of the trademark was finalized. The fair value of the acquisition date amounted to P212,000,000. Compute fpr the increase or (decrease) of the Goodwill in December 31, 2022

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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Corona Company purchased a patent for P284,375 on January 2, 2015. The patent was being amortized over its remaining legal life of fifteen years expiring on January 2, 2030. Early on January 2, 2018, Corona determined that the economic benefits of the patent would not last longer than ten years from the date of acquisition. What amount should be charged to patent amortization expense for the year ended December 31, 2018?
Clara Company purchased equipment for P5,000,000 on January 1, 2021 with a useful life of 10 years and no residual value. On December 31, 2022, the entity classified the asset as held for sale. The fair value of the equipment on December 31, 2022 is P3,300,000 and the cost of disposal is P100,000. On December 31, 2023 , the fair value of the equipment is P3,800,000 and the cost of disposal is P200,000. On December 31, 2023, the entity believed that the criteria for classification as held for sale can no longer be met. Accordingly, the entity decided not to sell the assets but to continue to use it. What amount of impairment loss should be recognized on December 31, 2021?
On May 28, 2024, Pesky Corporation acquired all of the outstanding common stock of Harman, Incorporated, for $460 million. The fair value of Harman's identifiable tangible and intangible assets totaled $540 million, and the fair value of liabilities assumed by Pesky was $180 million. Pesky performed a goodwill impairment test at the end of its fiscal year ended December 31, 2024. Management has provided the following information: Fair value of Harman, Incorporated $ 440 million Fair value of Harman's net assets (excluding goodwill) 375 Book value of Harman's net assets (including goodwill) 458 million million Required: 1. Determine the amount of goodwill that resulted from the Harman acquisition. 2. Determine the amount of goodwill impairment loss that Pesky should recognize at the end of 2024, if any. 3. If an impairment loss is required, prepare the journal entry to record the loss.
On January 1, 2020, Cecilia Company purchased a patent from an original patentee for P2,400,000. The remaining legal life of the patent is 15 years but the useful life is only 12 years. On January 1, 2021, the entity paid P550,000 in successfully defending the patent in an infringement suit filed against the entity. On January 1, 2022, the entity acquired a competing patent for P1,500,000. The competing patent has a remaining legal life of 15 years but it is not to be used because it was intended to protect the original patent. What is the carrying amount of the patent on December 31, 2022? А. 3,150,000 B. 3,600,000 С. 3,200,000 D. 3,500,000
An equipment was purchased by BB Company on January 1, 2019 for P5,000,000 with estimated useful life of 10 years and no salvage value. On January 1, 2021, the entity classified the asset as held for sale in accordance with PFRS 5. As of this date the fair value of the asset is P3,300,000 and cost to sell is P100,000. As of December 31, 2021. the entity believes that the criteria for classification as held for sale can no longer be met. The fair value of the equipment is P3,800,000 and cost to sell is P200,000 as of December 31, 2021 while the value in use amounted to 3,200,000. At what amount should the asset be reported in its 2021 statement of financial position?
On January 1, 2019, Intimate Corporation purchased land at a cost of P7,200,000. The entity used the revaluation model for this asset. The fair value of the land was P8,400,000 on December 31, 2019 and P10,200,000 on December 31, 2020. On July 1, 2021, the entity decided to sell the land and therefore classified the asset as held for sale. The fair value of the land on this date is P9,120,000. The estimated cost of disposal is almost zero. On December 31, 2021, the land was sold for P9,600,000. What amount of OCI should be recognized in the statement of comprehensive income for the year ended December 31, 2020? ₱480,000 ₱3,000,000 ₱1,080,000 ₱1,800,000 What amount of gain or loss on sale of land is recognized in 2021? ₱480,000 gain ₱2,400,000 gain ₱600,000 loss ₱1,200,000 gain What amount of OCI is transferred…
Snowy Ltd acquires Pax Ltd on 1 July 2018 for $5,000,000 being the fair value of the consideration transferred. At that date, Pax Ltd’s net identifiable assets have a fair value of $4,400,000. Goodwill of $600,000 is therefore the difference between the aggregate of the consideration transferred and the net identifiable assets acquired.The fair value of the net identifiable assets of Pax Limited are determined as follows:($000)Patent rights 200Machinery 1,000Buildings 1,500Land 2,3005,000Less: Bank loan 600Net assets 4,400At the end of the reporting period of 30 June 2019, the management of Snowy Ltd determines that the recoverable amount of the cash-generating unit, which is considered to be Pax Ltd, totals $4,500,000. The carrying amount of the net identifiable assets of Pax Ltd, excluding goodwill, is unchanged and remains at $4,400,000.Required:a) Prepare the journal entry to account for any impairment of goodwill.b) Assume instead that at the end of the reporting period the…
Splish Brothers Ltd. is a publicly listed company following IFRS. Assume that on December 31. 2020, the carrying amount of land on the statement of financial position (SFP) is $505.000. Management determines that the land's value in use is $435.000 and that the fair value less costs to sell is $400.000. Using the rational entity impairment model, prepare the journal entry required, if any, to record the impairment loss. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit December 31, 2020
On April 30, 2020, Sa Young Nam Company approved a plan to dispose of a segment of its business. At this date, the entity is committed to a plan to sell the segment and classifies its assets as Held for Sale. The carrying value of the segment's net assets on April 30 was P800,000. In compliance with IFRS 5, no further depreciation or amortization was taken up on these assets until they were sold in November. During November, disposal costs incurred by Sa Young Nam totaled P22,500. During the period January 1, 2020 through November 30, 2020, the segment had total revenues of P4,500,000 and total selling and administrative expenses of P4,080,00o. On November 30, 2020, the segment's net assets were sold for P850,000. The income tax rate is 30%. What is the single amount reported as discontinued operations in Sa Young Nam' profit or loss for 2020? A. P447,500 B. P397,500 С. Р313,250 D. P278,250
In 2023, Antle Incorporated had acquired Demski Company and recorded goodwill of $245 million as a result. The net assets (including goodwill) from Antle's acquisition of Demski Company had a 2024 year-end book value of $580 million. Antle assessed the fair value of Demski reporting unit at this date to be $700 million, while the fair value of all of Demski's identifiable tangible and intangible assets (excluding goodwill) was $550 million. The amount of the impairment loss that Antle would report for goodwill at the end of 2024 is: Multiple Choice $0. $120 million. $150 million. $95 million.
Amiable Company purchased an equipment for P5,000,000 on January 1, 2020. The equipment had a useful life of 5 years with no residual value. On December 31, 2020, the entity classified the equipment as held for sale. On such date, the fair value less cost of disposal of the equipment was P3,500,000. On December 31, 2021, the entity believed that the criteria for classification as held for sale can no longer be met. Accordingly, the entity decided not to sell the equipment but to continue to use it. On December 31, 2021, the fair value less cost of disposal of the equipment was P2,700,000. requirement What is the carrying amount of the equipment on December 31, 2020 before classification as held for sale? What is the adjusted carrying amount of the equipment on December 31, 2022?