On January 1, 2022, William Corp. (qualifies as SME) paid cash of P600,000 for all the outstanding shares of Kate Company. The carrying value of the assets and liabilities of Kate on January 1, 2022 follow: Accounts Receivable • Inventory • Plant & Equipment (net of Accumulated Depreciation of P220,000) Goodwill Liabilities P90,000 180,000 320,000 100,000 120,000 On January 1, 2022 Kate inventory had a fair value of P150,000 and plant & equipment (net) had a fair value of P380,000. Cost of arranging the combination are as follows: legal fees for combination, P30,000; finder's fee, P50,000; other miscellaneous direct costs, P25,000. Net income of William and Kate for 2022 amounts to P188,000 and P60,000, respectively. William received dividend of P18,000 from Kate during 2022. The PPE has original useful life of 10 years and was already held for 4 years as of date of acquisition. Determine the amount of Goodwill on the Consolidated balance sheet on December 31, 2022.
On January 1, 2022, William Corp. (qualifies as SME) paid cash of P600,000 for all the outstanding shares of Kate Company. The carrying value of the assets and liabilities of Kate on January 1, 2022 follow: Accounts Receivable • Inventory • Plant & Equipment (net of Accumulated Depreciation of P220,000) Goodwill Liabilities P90,000 180,000 320,000 100,000 120,000 On January 1, 2022 Kate inventory had a fair value of P150,000 and plant & equipment (net) had a fair value of P380,000. Cost of arranging the combination are as follows: legal fees for combination, P30,000; finder's fee, P50,000; other miscellaneous direct costs, P25,000. Net income of William and Kate for 2022 amounts to P188,000 and P60,000, respectively. William received dividend of P18,000 from Kate during 2022. The PPE has original useful life of 10 years and was already held for 4 years as of date of acquisition. Determine the amount of Goodwill on the Consolidated balance sheet on December 31, 2022.
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
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 8MC
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Transcribed Image Text:On January 1, 2022, William Corp. (qualifies as SME) paid cash of P600,000 for all the outstanding shares of Kate
Company. The carrying value of the assets and liabilities of Kate on January 1, 2022 follow:
Accounts Receivable
Inventory
•
Plant & Equipment (net of Accumulated
Depreciation of P220,000)
Goodwill
Liabilities
P90,000
180,000
320,000
100,000
120,000
On January 1, 2022 Kate inventory had a fair value of P150,000 and plant & equipment (net) had a fair value of
P380,000. Cost of arranging the combination are as follows: legal fees for combination, P30,000; finder's fee,
P50,000; other miscellaneous direct costs, P25,000.
Net income of William and Kate for 2022 amounts to P188,000 and P60,000, respectively. William received dividend
of P18,000 from Kate during 2022. The PPE has original useful life of 10 years and was already held for 4 years as
of date of acquisition.
Determine the amount of Goodwill on the Consolidated balance sheet on December 31, 2022.
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