XYZ Co had the following accounts at the time it was acquired by ABC Inc (see image below). ABC paid P1,400,000 for the net assets of XYZ. It was determined that the fair market value of inventories and PPE were P133,000 and P900,000 respectively. There is an assumed contingent liability arising from past events with a fair value amounting to P10,000 and such amount is considered a reliable measurement. Compute for a) Cost of Acquisition and b) goodwill or gain from acquisition (two answers) Cash. P. 36,000 .......

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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XYZ Co had the following accounts at the time it was acquired by ABC Inc (see image below). ABC paid
P1,400,000 for the net assets of XYZ. It was determined that the fair market value of inventories and PPE were
P133,000 and P900,000 respectively. There is an assumed contingent liability arising from past events with a
fair value amounting to P10,000 and such amount is considered a reliable measurement. Compute for a) Cost
of Acquisition and b) goodwill or gain from acquisition (two answers)
Cash .
Accounts receivable
Inventories .
Plant, property, and equipment . ..
Accounts payable .
P. 36.000
457,000
120,000
696,400
350,800
*****
Transcribed Image Text:XYZ Co had the following accounts at the time it was acquired by ABC Inc (see image below). ABC paid P1,400,000 for the net assets of XYZ. It was determined that the fair market value of inventories and PPE were P133,000 and P900,000 respectively. There is an assumed contingent liability arising from past events with a fair value amounting to P10,000 and such amount is considered a reliable measurement. Compute for a) Cost of Acquisition and b) goodwill or gain from acquisition (two answers) Cash . Accounts receivable Inventories . Plant, property, and equipment . .. Accounts payable . P. 36.000 457,000 120,000 696,400 350,800 *****
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