What the amount of goodwill to be recognized is

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On this date, P Company issued 150,000 shares, P18 fair market value, for 80% of the outstanding shares of S Company. P Company paid P30,000 for printing and registering the new shares issued, P25,000 for legal and other professional fees, P25,000 for CPA audit fees and P10,000 for miscellaneous direct costs. On this date, S Company identifiable assets and liabilities carrying values are equal to their fair market values except for Inventories which is P100,000 less than its carrying value. The business combination is between two SMES.

Problem 1. The amount of goodwill to be recognized is:

Reference no: EM132660673

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