On April 7, 2021, Nestle Co. paid P620,000 for all the issued and outstanding ordinary shares of Magnolia Corp. in a transaction properly accounted as a purchase. The recorded assets and liabilities of Magnolia Corp. on April 1, 2021 are: Cash 60,000 Inventory 180,000 Property and equipment (net of accumulated depreciation of P220,000) 320,000 Goodwill 100,000 Liabilities (120,000) Net assets 540,000 On April 1, 2021, Magnolia Corp 's inventory had a fair value of P150,000 and the property and equipment (net) had a fair value of P380,000. What is the amount of goodwill resulting from the business combination?

On April 7, 2021, Nestle Co. paid P620,000 for all the issued and outstanding ordinary shares of Magnolia Corp. in a transaction properly accounted as a purchase. The recorded assets and liabilities of Magnolia Corp. on April 1, 2021 are: Cash 60,000 Inventory 180,000 Property and equipment (net of accumulated depreciation of P220,000) 320,000 Goodwill 100,000 Liabilities (120,000) Net assets 540,000 On April 1, 2021, Magnolia Corp 's inventory had a fair value of P150,000 and the property and equipment (net) had a fair value of P380,000. What is the amount of goodwill resulting from the business combination?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 25E

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