Solution-Compute the goodwill, Accordingly, B Co. did not

Compute the goodwill

Reference no: EM133109983

Question - A Co. acquired all the assets and liabilities of B Co. for P1,600,000. Information on B's identifiable assets and liabilities as at the acquisition date is as follows:

	Carrying amounts	Fair values
Assets	3,800,000	3,500,000
Liabilities	2,000,000	1,900,000

As at the acquisition, date B Co. has breached a contract with a customer. The customer is seeking damages amounting to P250,000. However, B Co. is currently disputing the customer claim and B Co.'s legal counsel believes they will win the case. Accordingly, B Co. did not recognize a provision. The fair value of settling the claim is P100,000.

Fair value adjustments to the assets acquired and liabilities assumed have deferred tax consequences, but do not affect the tax bases of the assets and liabilities. The tax rate is 30%.

Required - Compute the goodwill.

Reference no: EM133109983

Questions Cloud

Behavior of fixed costs-variable costs-semi-variable costs : Describe the differences in behavior of fixed costs, variable costs, semi-variable costs and step costs.

Identify management aptitude : What is the objective or purpose in taking this self-assessment to identify management aptitude?

What was the cost of goods manufactured for the month : Last month, a manufacturing company had the following operating results: Ending finished goods inventory $73,000. What was the cost of goods manufactured

Select health care facility or service that accepts medicaid : Select health care facility or service that accepts Medicaid. Identify ways that Medicaid discounting can cause hardships on type of facility that you selected

Compute the goodwill : Accordingly, B Co. did not recognize a provision. The fair value of settling the claim is P100,000. Compute the goodwill

Diversity within upper management : Despite increases in diversity training programs, outcomes are not consistently leading to increases of diversity within upper management.

Which is the maximum amount that cadbury can save : Which of the following is the maximum amount that Cadbury can save in taxes each year by changing their current transfer price from AUD2,500 per ton

What is the firm wacc : Your Company needs to purchase new machine to meet the demand for its product. The cost of the equipment is $300,000. It is estimated that the firm will increas

Explain the value investing and growth investing : Use relevant, cotemporary, real-life examples to carry out a critical comparison between value investing and growth investing. How are these approaches relevant

User Account

All Pages

Compute the goodwill

Reference no: EM133109983

Reference no: EM133109983

Questions Cloud

Reviews

Write a Review

Accounting Basics Questions & Answers

Was the bir action proper explain

What is the price of the product in Switzerland

Determine the type of audit opinion which should be given

Give the effect of the errors in the working capital

Calculate the correlation coefficient

Is George required to recognize any income

What is the balance in the investment in harrison account

Prepare the journal entry to record lexington''s payroll

Describe the benefits and drawbacks of each type of card

What is zehms net income

Discuss reasons for internal audit department in MonteHodge

Differentiate between the operating plan and financial plan

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT