Parent Company acquired 18,000 shares of S Company's ordinary share on January 1, 2021, for payment of P3,000,000 when S Company's stockholders' equity section appeared as follows: Ordinary Share, P100 par, 25,000 shares issued Share Premium Retained Earnings Total Stockholders' Equity P2,500,000 700,000 800,000 200,000 Assets and liabilities of S Company has book values approximately equal to their fair values except for its inventory with a book value of P100,000 and a fair value of P130,000 and land with a book value of P400,000 and a fair value of P420,000. Assuming the use of full-goodwill approach, compute for the goodwill.

Parent Company acquired 18,000 shares of S Company's ordinary share on January 1, 2021, for payment of P3,000,000 when S Company's stockholders' equity section appeared as follows: Ordinary Share, P100 par, 25,000 shares issued Share Premium Retained Earnings Total Stockholders' Equity P2,500,000 700,000 800,000 200,000 Assets and liabilities of S Company has book values approximately equal to their fair values except for its inventory with a book value of P100,000 and a fair value of P130,000 and land with a book value of P400,000 and a fair value of P420,000. Assuming the use of full-goodwill approach, compute for the goodwill.

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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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

Parent Company acquired 18,000 shares of S Company's ordinary share on January 1, 2021, for payment of
P3,000,000 when S Company's stockholders' equity section appeared as follows:
Ordinary Share, P100 par, 25,000 shares issued
Share Premium
Retained Earnings
Total Stockholders' Equity
P2,500,000
700,000
800,000
200,000
Assets and liabilities of S Company has book values approximately equal to their fair values except for its inventory
with a book value of P100,000 and a fair value of P130,000 and land with a book value of P400,000 and a fair value
of P420,000. Assuming the use of full-goodwill approach, compute for the goodwill.

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