acquisition date, the acquirer could only determine a provisional fair value for the Plant. On March 9, 2022, ABC received the final value from the independent appraisal, the fair value of the Plant at acquisition date is P131,000 with a 5 year remaining useful life from date of acquisition. Determine a) Fair value of the net assets acquired b) amount of goodwill or gain from acquisition (two answers)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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11. On December 1, 2021, ABC
Company acquired all the
assets and liabilities of XYZ
Inc. issuing 100,000 shares.
The fair value of XYZ's assets
and liabilities at this date are
presented below (see image)
The financial year for ABC
Company is January to
December. The fair value of
each ABC share at acquisition
date is P1.90. At the
acquisition date, the acquirer
could only determine a
provisional fair value for the
Plant. On March 9, 2022, ABC
received the final value from
the independent appraisal, the
fair value of the Plant at
acquisition date is P131,000
with a 5 year remaining useful
life from date of acquisition.
Determine a) Fair value of the
net assets acquired b) amount
of goodwill or gain from
acquisition (two answers)
Cash.
Furniture and fittings
Accounts receivable
Plant.
Accounts payable.
Current tax liability
Provision for annual leave
P50,000
20,000
5,000
125,000
15,000
8,000
2,000
Transcribed Image Text:11. On December 1, 2021, ABC Company acquired all the assets and liabilities of XYZ Inc. issuing 100,000 shares. The fair value of XYZ's assets and liabilities at this date are presented below (see image) The financial year for ABC Company is January to December. The fair value of each ABC share at acquisition date is P1.90. At the acquisition date, the acquirer could only determine a provisional fair value for the Plant. On March 9, 2022, ABC received the final value from the independent appraisal, the fair value of the Plant at acquisition date is P131,000 with a 5 year remaining useful life from date of acquisition. Determine a) Fair value of the net assets acquired b) amount of goodwill or gain from acquisition (two answers) Cash. Furniture and fittings Accounts receivable Plant. Accounts payable. Current tax liability Provision for annual leave P50,000 20,000 5,000 125,000 15,000 8,000 2,000
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