S Company had the following balances at the time it was acquired by P Company: Cash P36,000 Accounts receivable 457,000 Inventories 120,000 Property, plant and equipment 696,400 Goodwill 200,000 Accounts payable 350,800 P Company paid P1.4M for the net assets of S Company. It was determined that fair market values of inventories and property, plant and equipment were P133,000 and P900,000, respectively. An assumed contingent liability with a fair value amounting to P20,000 and such amount is considered a reliable measurement. Also, a P50,000 future losses or reorganization/ restructuring costs are expected to be incurred as a result of the business combination. In the books of P Company, how will be the amount of Goodwill arising from business combination?
S Company had the following balances at the time it was acquired by P Company:
Cash P36,000
Inventories 120,000
Property, plant and equipment 696,400
Accounts payable 350,800
P Company paid P1.4M for the net assets of S Company. It was determined that fair market values of inventories and property, plant and equipment were P133,000 and P900,000, respectively.
An assumed
In the books of P Company, how will be the amount of Goodwill arising from business combination?
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