Compute the goodwill or gain from acquisition

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Question - XYZ co had the following accounts at the time it was acquired by ABC Inc.

Cash P36,000

Accounts Receivable 457,000

Inventories 120,000

PPE 696,400

Accounts payable 350,800

ABC paid 1,400,000 for the net assets of XYZ. It was determined that the fair market value of inventories and PPE were P113,000 and P900,000 respectively. There is an assumed contingent liability arising from past events with a fair value amounting to P10,000 and such amount is considered a reliable measurement.

Required -

1. Compute the cost of acquisition?

2. Compute the goodwill or gain from acquisition?

Reference no: EM133127343

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