On January 1, 2020, PEARLS Corporation acquired the identifiable net assets of START UP Company. On this date, the identifiable assets acquired and liabilities assumed have fair values of P6.4M and P3.6M, respectively. PEARLS incurred the following acquisition-related costs: legal fees - 40,000; due diligence costs - 400,000 and general admin costs - 80,000. As consideration, PEARLS issued 8,000 shares with par value and fair value per share of P400 and P500 respectively. Costs of registering and listing the shares amounted to P160,000. How much is the goodwill on the business combination, assuming both companies qualified as SME?
On January 1, 2020, PEARLS Corporation acquired the identifiable net assets of START UP Company. On this date, the identifiable assets acquired and liabilities assumed have fair values of P6.4M and P3.6M, respectively. PEARLS incurred the following acquisition-related costs: legal fees - 40,000; due diligence costs - 400,000 and general admin costs - 80,000. As consideration, PEARLS issued 8,000 shares with par value and fair value per share of P400 and P500 respectively. Costs of registering and listing the shares amounted to P160,000. How much is the goodwill on the business combination, assuming both companies qualified as SME?
Chapter16: Accounting Periods And Methods
Section: Chapter Questions
Problem 15DQ
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Transcribed Image Text:On January 1, 2020, PEARLS Corporation acquired the identifiable net assets of START UP Company.
On this date, the identifiable assets acquired and liabilities assumed have fair values of P6.4M and
P3.6M, respectively. PEARLS incurred the following acquisition-related costs: legal fees - 40,000; due
diligence costs - 400,000 and general admin costs - 80,000. As consideration, PEARLS issued 8,000
shares with par value and fair value per share of P400 and P500 respectively. Costs of registering and
listing the shares amounted to P160,000.
How much is the goodwill on the business combination, assuming both companies qualified as SME?
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