Shareholders of the two companies agree that a single class of shares be issued, that their contributions be measured by net assets plus allowances for goodwill, and that 10% be considered as a normal rate of return. Earnings in excess of the normal rate of return shall be capitalized at 20% in calculating goodwill. It was also agreed that the authorized capital stock of the new corporation shall be 20,000 shares with a par value of P100 per share. The amount of goodwill credited to Co. A, and the total contribution of Co. B (net assets plus goodwill) is: a. P100,000; P400,000 b. P100,000; P600,000 c. P150,000; P500,000 d. P200,000; P600,000

Shareholders of the two companies agree that a single class of shares be issued, that their contributions be measured by net assets plus allowances for goodwill, and that 10% be considered as a normal rate of return. Earnings in excess of the normal rate of return shall be capitalized at 20% in calculating goodwill. It was also agreed that the authorized capital stock of the new corporation shall be 20,000 shares with a par value of P100 per share. The amount of goodwill credited to Co. A, and the total contribution of Co. B (net assets plus goodwill) is: a. P100,000; P400,000 b. P100,000; P600,000 c. P150,000; P500,000 d. P200,000; P600,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

What aspects of accounting are being influenced by information technology? Explain
Micro-business entities can use which basis of accounting
Explain business entity concept in detail with example.
Please answer multichoice question in photo
Explain the importance to understanding the business operation flow.
A machine costing $209,600 with a four-year life and an estimated $16,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 484,000 units of product during its life. It actually produces the following units: 122,900 in Year 1, 123,100 in Year 2, 120,800 in Year 3, 127,200 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate-this difference was not predicted. (The machine cannot be depreciated below its estimated salvage value.) Required: Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. (Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.) Complete this question by entering your answers in the tabs below. Units of Straight Line DDB Production Compute depreciation for each year (and total depreciation of all years combined) for the machine…
3. Identify the seven categories of Enterprise Enablers 4. What is COSO Internal Control Frame work?
Discuss Principle-Agent Problem and Give an example in the business world
What does the R2measure? What is the R2for a typical company?
explain in detail, what is a firm, why firms exist and what are Coasian transaction c osts?
What is the business segment? Give some examples.
Management accounting focus on the benefits of users. Select one: True O False PE cam ump toa Retum to: General