P0P3,000,000P3,600,000P4,000,000answer not given Kiwi Co. purchased another entity for P5,000,000 cash. The carryingamount and fair value were associated with this acquisition:CarryingFair valueamountAccounts receivable2,000,0002,000,000Inventory1,000,000500,000Government contractEquipmentShort-term loan payable1,000,000500,000(2,000,000)400,000(2,000,000)Net assets1,400,00020,000,000The fair value associated with the acquired entity's governmentcontract is not based on any legal or contractual relationship. Inaddition, for obvious reason, there is no open market trading for anintangible of this sort. What is the goodwill arising from theacquisition?

Goodwill is an intangible asset of a company which exists due to the company’s customer base, brand…

Kiwi Co. purchased another entity for P5,000,000 cash. The carrying amount and fair value were associated with this acquisition: Carrying Fair value amount Accounts receivable 2,000,000 2,000,000 Inventory 1,000,000 500,000 1,000,000 500,000 Government contract Equipment Short-term loan payable 400,000 (2,000,000) (2,000,000) 20,000,000 Net assets 1,400,000 The fair value associated with the acquired entity's government contract is not based on any legal or contractual relationship. In addition, for obvious reason, there is no open market trading for an intangible of this sort. What is the goodwill arising from the acquisition?

Kiwi Co. purchased another entity for P5,000,000 cash. The carrying amount and fair value were associated with this acquisition: Carrying Fair value amount Accounts receivable 2,000,000 2,000,000 Inventory 1,000,000 500,000 1,000,000 500,000 Government contract Equipment Short-term loan payable 400,000 (2,000,000) (2,000,000) 20,000,000 Net assets 1,400,000 The fair value associated with the acquired entity's government contract is not based on any legal or contractual relationship. In addition, for obvious reason, there is no open market trading for an intangible of this sort. What is the goodwill arising from the acquisition?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Kiwi Co. purchased another entity for P5,000,000 cash. The carrying amount and fair value were associated with this acquisition: Carrying Fair value amount Accounts receivable 2,000,000 2,000,000 Inventory 1,000,000 500,000 Government contract 1,000,000 Equipment Short-term loan payable 400,000 500,000 (2,000,000) 1,400,000 (2,000,000) Net assets 20,000,000 The fair value associated with the acquired entity's government contract is not based on any legal or contractual relationship. In addition, for obvious reason, there is no open market trading for an intangible of this sort. What is the goodwill arising from the acquisition?
The partners of the Liwa Engineering Company have decided to terminate the business. The balances of the company's accounts prior to the liquidation are given in the Table 1. Table 1 Book value in OMR Cash 28,500 Plant assets (net) 75,000 Machinery and equipment (net) 2,500 Inventories 1,300 Liabilities 47,300 Capital, Partner 1 36,000 Capital, Partner 2 24,000 Additional information: The partner 1 and the partner 2 share profits and losses in the ratio 7:3. In the process of liquidation, the non-cash assets are sold for OMR 125,000. Required: A. You are asked to prepare a schedule of cash payments (Table 2), showing how cash will be distributed between the partners as it becomes available. B. Based on the information above (Table 2 – Schedule of Cash Payments), journalize the transactions.
How much should be recorded as the purchase price of theindividual PPE items: 5. The old equipment has an original cost of P1,500,000,accumulated depreciation of P600,000, and fair value ofP1,000,000. The new equipment obtained throughexchange has a fair value of P1,200,000. The balance was settled with cash. The exchange will not affect the future cashflows of the entity.
1. The Judi Company purchased another entity for P8,000,000 cash. A schedule of the fair value of the acquired entity's assets and liabilities is prepared as of the purchase date. Cash Accounts Receivable Inventory Property, plant and equipment 6,550,000 Accounts payable Notes Payable - Bank (long-term) 1,950,000 Net assets at fair value 100,000 850,000 1,300,000 4,300,000 950,000 1,000,000 4,600,000 Compute for the amount of goodwill using residual approach. a. P 1,450,000 b. 3,400,000 c. P 4,600,000 d. P 2,900,000
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On 1 July 2021 Collaroy Ltd acquired the following assets and liabilities from Bilgola Ltd Carrying amount Fair value Land $500,000 550,000 Plant ( cost $400,000) 480,000 460,000 Inventory 65,000 63,800 Cash 15,000 15,000 Accounts Receivable 40,000 38,600 Accounts Payable (20,000) (20,000) Loans (110,000) (110,000) In exchange for these assets and liabilities Collaroy issued 160,000 shares at $1.70 per share . At 1 July 2021 these shares had a fair value at $7.35 per share Required Prepare the journal entry for the above
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Columbia recently acquired all of Mercury's net assets in a business acquisition. The cash purchase price was $22,000,000. Mercury's assests and liabilites had the following costs and appraised values: Current assets Land, building and equipment Current liabilites Mortgage payable How much goodwill will rewult from this transaction? Cost Basis $ 6,000,000 $ 14,000,000 Appraised Value $ 6,000,000 $23,000,000 $4,000,000 $4,000,000 $ 10,000,000 $10,000,000
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Prince Company and Albert Company agreed to exchange tractor trailers. Information relating to these assets is as follows: Prince Albert Original acquisition cost 1,500,000 800,000 Accumulated depreciation 700,000 720,000 Fair value on date of exchange 900,000 150,000 In accordance with the agreement, Albert will pay P750,000 in cash to Prince which is the difference in fair value. Requirements: Indicate the appropriate journal entries each for Prince Company and Albert Company respectively
The fair value of the net identifiable assets of Pax Limited are determined as follows:($000)Patent rights 200Machinery 1,000Buildings 1,500Land 2,3005,000Less: Bank loan 600Net assets 4,400At the end of the reporting period of 30 June 2019, the management of Snowy Ltd determines thatthe recoverable amount of the cash-generating unit, which is considered to be Pax Ltd, totals$4,500,000. The carrying amount of the net identifiable assets of Pax Ltd, excluding goodwill, isunchanged and remains at $4,400,000.Required:a) Prepare the journal entry to account for any impairment of goodwill. (6 marks)b) Assume instead that at the end of the reporting period the management of Snowy Ltd determinesthat the recoverable amount of the cash-generating unit, which is considered to be Pax Ltd, totals$4,200,000. Determine the impairment of goodwill amount.
Mohave Inc. purchased land, building, and equipment from Laguna Corporation for a cash payment of $315,000. The estimated fair values of the assets are land, $60,000; building, $220,000; and equipment, $80,000. Journalize the purchase using the relative sales value method. Date Account Debit Credit MM/DD/YY 6 of 9