What is the goodwill arising from the acquisition?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter12: Intangibles
Section: Chapter Questions
Problem 9MC
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Question
CARNATION Company purchased an entity for ₱6,000,000 cash on January 31. The book value and fair value of the assets of the acquired entity as of the date of acquisition follow:
What is the
₱ 700,000
₱ 4,450,000
₱ 2,450,000
₱ 2,700,000
![Book Value
Fair Value
Cash
50,000 P
50,000
Accounts receivable
500,000
500,000
Inventory
1,000,000
1,500,000
Patent
250,000
Property, plant and equipment
2,000,000
3,000,000
In addition, the acquired entity had liabilities totaling P2,000,000 at the time of the
acquisition. The acquired entity has no other separately identifiable intangible assets.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F914ded04-9085-4572-8502-8291946bd00b%2F56baf4d1-ea34-4896-8801-afc866bd1d2a%2Fzvyv5t_processed.png&w=3840&q=75)
Transcribed Image Text:Book Value
Fair Value
Cash
50,000 P
50,000
Accounts receivable
500,000
500,000
Inventory
1,000,000
1,500,000
Patent
250,000
Property, plant and equipment
2,000,000
3,000,000
In addition, the acquired entity had liabilities totaling P2,000,000 at the time of the
acquisition. The acquired entity has no other separately identifiable intangible assets.
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