SABC’s assets and liabilities were as follows: Cash and Receivables P75,000; Merchandise Inventory P187,500; Building and Equipment (net of depreciation of P100,000); Current Liabilities P87,500. On December 31, 2021, PDEF Company paid P618,750 cash for all the outstanding share of SABC. On the day of business combination, the fair value of the merchandise inventory was P156,250 and the fair value of the building and equipment (net) was P481,250. The goodwill (gain on bargain purchase) resulting form this acquisition amounts to:   A. (6,250) B. 6,250 C. 18,750 D. (18,750)

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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SABC’s assets and liabilities were as follows: Cash and Receivables P75,000;
Merchandise Inventory P187,500; Building and Equipment (net of depreciation of
P100,000); Current Liabilities P87,500. On December 31, 2021, PDEF Company
paid P618,750 cash for all the outstanding share of SABC. On the day of business
combination, the fair value of the merchandise inventory was P156,250 and the
fair value of the building and equipment (net) was P481,250. The goodwill (gain
on bargain purchase) resulting form this acquisition amounts to:

 

A. (6,250)
B. 6,250
C. 18,750
D. (18,750)

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