note:Total Stockholders' Equity of P200,000 should be Treasury Shares Parent Company acquired 18,000 shares of S Company's ordinary share on January 1, 2021, for payment ofP3,000,000 when S Company's stockholders' equity section appeared as follows:Ordinary Share, P100 par, 25,000 shares issuedShare PremiumRetained EarningsTotal Stockholders' EquityP2,500,000700,000800,000200,000Assets and liabilities of S Company has book values approximately equal to their fair values except for its inventorywith a book value of P100,000 and a fair value of P130,000 and land with a book value of P400,000 and a fair valueof P420,000. Assuming the use of full-goodwill approach, compute for the goodwill.

Particulars Parent Share (72%) Minority Share (28%) Total Value (100%) Purchase Price…

Answered: Assuming the use of full-goodwill…

Business

Accounting

Assuming the use of full-goodwill approach, compute for the goodwill.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 24E

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Question

note:Total Stockholders' Equity of P200,000 should be Treasury Shares

Parent Company acquired 18,000 shares of S Company's ordinary share on January 1, 2021, for payment of
P3,000,000 when S Company's stockholders' equity section appeared as follows:
Ordinary Share, P100 par, 25,000 shares issued
Share Premium
Retained Earnings
Total Stockholders' Equity
P2,500,000
700,000
800,000
200,000
Assets and liabilities of S Company has book values approximately equal to their fair values except for its inventory
with a book value of P100,000 and a fair value of P130,000 and land with a book value of P400,000 and a fair value
of P420,000. Assuming the use of full-goodwill approach, compute for the goodwill.

Definition Definition Assets available to stockholders after a company's liabilities are paid off. Stockholders’ equity is also sometimes referred to as owner's equity. A stockholders’ equity or book value generally includes common stock, preferred stock, and retained earnings and is an indicator of a company's financial strength.

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