Reference no: EM132950777

PROBLEM - On December 31, 2018, Alpha Company acquired 25.000 common stock and 30,000 preferred stock of Beta Company The fair value of the shares of Beta Company at that date is P10 par for common stock and P12 par for preferred stock On January 31, 2019. Alpha Company purchased another 35,000 common stock of Beta Company at P12 and on that date the value of the common stock of Beta was P15 par On January 1, 2021, Alpha Company purchased another 52,500 common stock of Beta company at P20 par which will be paid 50% on the date of acquisition and 50% on December 31, 2021 The outstanding capital stock of Beta was 150.000 and the fair value as of January 1, 2021 was P15 and the implicit interest rate was 10%. The fair value of the and book value of Beta company's net assets was P2,500,000.0

Required -

1. What is the amount of goodwill?

2. Assuming that Alpha company will pay Beta Company an additional P150.000, if the cash flow of the company exceeds 1,000,000 on 2021 1.500.000 on 2022, and 3.000.000 on 2023, Alpha Company assessed that on 2021 there is a 20% chance of attaining the cash flow while on 2022 and 2023 there is a 40% chance, it is estimated that there is a 45% chance that the entire cashflow for the three year period will exceed the conespanding amounts. What is the amount of goodwill at the date of acquisition?

3. Assuming a deferred payment of P25,600 to be paid after three years to two former owners who become employees of Alpha company, the payment of which is dependent on their continuing employment or affected by their termination, and the amount payable is adjusted for yearly interest the implicit interest on 3 years were 10% 12% and 14% How much is the amount of goodwill?