on for the business combination, ABC Co. incurred transaction costs amounting to ₱400,000 for legal, accounting, and consultancy fees. If ABC Co. paid ₱6,000,000 cash as consideration for the assets and liabilities of ABC, Inc., how much is the goodwill on the business combination? USE PROPER ACCOUNTING FORM.
on for the business combination, ABC Co. incurred transaction costs amounting to ₱400,000 for legal, accounting, and consultancy fees. If ABC Co. paid ₱6,000,000 cash as consideration for the assets and liabilities of ABC, Inc., how much is the goodwill on the business combination? USE PROPER ACCOUNTING FORM.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On January 1, 2021, ABC Company acquired all of the assets and assumed all of the liabilities of XYZ, Inc. As of this date, the carrying amounts and fair values of the assets and liabilities of XYZ acquired by ABC are shown below: (see image) On the negotiation for the business combination, ABC Co. incurred transaction costs amounting to ₱400,000 for legal, accounting, and consultancy fees. If ABC Co. paid ₱6,000,000 cash as consideration for the assets and liabilities of ABC, Inc., how much is the
USE PROPER ACCOUNTING FORM.
Transcribed Image Text:Carrying amounts
40,000
Fair values
Assets
Cash in bank
40,000
Receivables
800,000
480,000
Allowance for probable losses on
(120,000)
receivables
Inventory
Building - net
Goodwill
2,080,000
4,000,000
400,000
7,200,000
1,400,000
4,400,000
80,000
6,400,000
Total assets
Liabilities
Payables
1,600,000
1,600,000
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