Assets Cash The statement of financial position of Humility Company as of 31, 2021 is as follows: Accounts receivable Inventories Property, plant and equipment P 175,000 250,000 725,000 950,000 P 2,100,000 Liabilities and Shareholders' Equity Current liabilities P Mortgage payable Ordinary share capital Share premium Accumulated profits 250,000 450,000 200,000 400,000 800,000 P 2,100,000 On January 14, 2022 the Faithful Inc. bought all of the outstanding shares of Humility Company for P1,800,000 cash. On the date of acquisition, the fair market value of Humility's inventories was P 675,000, while the fair value of Humility's property, plant equipment was P 1,100,000. The fair value of all other assets and liabilities of Humility were equal to their book values. Legal fees incurred amounted to P20,000. Contingent consideration with estimated fair value of P50,000 is also available on that date. Required 1. The amount of goodwill recorded in the books of Faithful Inc. 2. Assuming Faithful purchased 75% interest of Humility for P1,500,000 and NCI is measured using the proportionate method, how much is the goodwill on combination?
Assets Cash The statement of financial position of Humility Company as of 31, 2021 is as follows: Accounts receivable Inventories Property, plant and equipment P 175,000 250,000 725,000 950,000 P 2,100,000 Liabilities and Shareholders' Equity Current liabilities P Mortgage payable Ordinary share capital Share premium Accumulated profits 250,000 450,000 200,000 400,000 800,000 P 2,100,000 On January 14, 2022 the Faithful Inc. bought all of the outstanding shares of Humility Company for P1,800,000 cash. On the date of acquisition, the fair market value of Humility's inventories was P 675,000, while the fair value of Humility's property, plant equipment was P 1,100,000. The fair value of all other assets and liabilities of Humility were equal to their book values. Legal fees incurred amounted to P20,000. Contingent consideration with estimated fair value of P50,000 is also available on that date. Required 1. The amount of goodwill recorded in the books of Faithful Inc. 2. Assuming Faithful purchased 75% interest of Humility for P1,500,000 and NCI is measured using the proportionate method, how much is the goodwill on combination?
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter4: Balance Sheet: Presenting And Analyzing Resources And Financing
Section: Chapter Questions
Problem 32P
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
College Accounting, Chapters 1-27 (New in Account…
Accounting
ISBN:
9781305666160
Author:
James A. Heintz, Robert W. Parry
Publisher:
Cengage Learning