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What is the acquisition cost of the entity

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Reference no: EM132771622

Problem 1: The owners of Rainier Company are planning to sell the business to new interests. The cumulative net earnings for the past five years amounted to P16,500,000 including expropriation loss of P1,500,000. Goodwill is measured by capitalizing excess earnings at 25% with normal earnings at 20%. The fair value of net assets of the entity at current year-end was P10,000,000. What is the acquisition cost of the entity?

Reference no: EM132771622

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