please help me to answer completely the required 1 and 2 of problem 6-8. Thank you! 381PROBLEM 6-8CEBU PACIFIC COMPANY is considering to buy another entity and assembled thefollowing information relative to the acquiree on Dec. 31, 2020.Per BooksP3,000,000500,000P3,500,000AdjustedP2,850,000500,000P3,350,000AssetsGoodwillLiabilitiesP1,600,0001,000,000900,000P3,500,000P1,600,0001,000,000750,000P3,350,000Common StockRetained EarningsPer BooksP700,000650,000(450,000)P900,000AdjustedP600,000600,000(450,000)P750,000Retained earnings, Jan. 1, 2018Net income (2018- 20)Dividends (2018- 20Retained Earnings, Dec. 31, 2020Gain on sale of equipment in 2020P50,000P75,000The future earnings are expected to be the same as the average normal earnings of thepast three(3) years. The average earnings in excess of the 10% normal rate are capitalized at16% in determining goodwill.REQUIRED:1. Compute the amount of goodwill.2. Compute the purchase price to be paid by Cebu Pacific Company to the acquiree.

Super profit is the profit earned over and above normal profit Goodwill refer to the future super…

Answered: PROBLEM 6-8 CEBU PACIFIC COMPANY is…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 30E

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