1. ANEMONE Company engaged your services to compute the goodwill in the purchase of another company which provided the following: Net income Net assets 2018 P 2,000,000 P 7,800,000 2019 2,500,000 8,700,000 2020 3,900,000 9,000,000 Goodwill is measured by capitalizing excess earnings at 25% with normal on average net assets at 20% How much is the goodwill?
1. ANEMONE Company engaged your services to compute the goodwill in the purchase of another company which provided the following: Net income Net assets 2018 P 2,000,000 P 7,800,000 2019 2,500,000 8,700,000 2020 3,900,000 9,000,000 Goodwill is measured by capitalizing excess earnings at 25% with normal on average net assets at 20% How much is the goodwill?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. ANEMONE Company engaged your services to compute the
| Net income | Net assets | |
| 2018 | P 2,000,000 | P 7,800,000 |
| 2019 | 2,500,000 | 8,700,000 |
| 2020 | 3,900,000 | 9,000,000 |
Goodwill is measured by capitalizing excess earnings at 25% with normal on average net assets at 20%
How much is the goodwill?
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