Abakada Incorporated acquired all the assets and liabilities of Egaha Company on January 1,2018. The consideration are as follows:CashEquipmentCash contingencyStock contingencyBank loan, at face valueThe cash payments are distributed to the following payees:Former owners of Egaha CompanyLawyers for legal servicesActuarial for valuation of Egaha's net assetsBank, transaction costs for the bank loan2,000,000500,00030,00050,0001,000,000Business CombinationPage 4 of 51,800,00080,00050,00070,000Answer the following independent questions:19. If the fair value of net assets of Egaha amounted to Php3,000,000, how much is the goodwill(bargain purchase gain) on business combination?20. If bargain purchase gain on the acquisition amounted to Php40,000, how much could bethe fair value of net assets acquired?

The term "acquisition" describes when one firm buys another, and the acquired company merges with…

Abakada Incorporated acquired all the assets and liabilities of Egaha Company on January 1, 2018. The consideration are as follows: Cash Equipment Cash contingency Stock contingency Bank loan, at face value 2,000,000 500,000 30,000 50,000 1,000,000 The cash payments are distributed to the following payees: Former owners of Egaha Company Lawyers for legal services Actuarial for valuation of Egaha's net assets Bank, transaction costs for the bank loan Business Combination Page 4 of 5 1,800,000 80,000 50,000 70,000 Answer the following independent questions: 19. If the fair value of net assets of Egaha amounted to Php3,000,000, how much is the goodwill (bargain purchase gain) on business combination? 20. If bargain purchase gain on the acquisition amounted to Php40,000, how much could be the fair value of net assets acquired?

Abakada Incorporated acquired all the assets and liabilities of Egaha Company on January 1, 2018. The consideration are as follows: Cash Equipment Cash contingency Stock contingency Bank loan, at face value 2,000,000 500,000 30,000 50,000 1,000,000 The cash payments are distributed to the following payees: Former owners of Egaha Company Lawyers for legal services Actuarial for valuation of Egaha's net assets Bank, transaction costs for the bank loan Business Combination Page 4 of 5 1,800,000 80,000 50,000 70,000 Answer the following independent questions: 19. If the fair value of net assets of Egaha amounted to Php3,000,000, how much is the goodwill (bargain purchase gain) on business combination? 20. If bargain purchase gain on the acquisition amounted to Php40,000, how much could be the fair value of net assets acquired?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 11C

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