Kenny Inc., had the following information for intangible assets for year under audit. The following were...
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Kenny Inc., had the following information for intangible assets for year under audit. The following were noted during the period: Note 1: Identifiable assets Kenny Inc. acquired the net assets of Bee Inc. on June 30, 2023 in a business combination. The cost of acquisition is P500,000 greater that the total book value of the company's identifiable net assets. The book value of the company's identifiable assets approximates their fair values except for the following: Patent Customer lists Franchise Book value Year 2019 250,000 750,000 600,000 2020 2021 2022 Fair value Note 2: Non identifiable assets Kenny Inc. engaged your services to compute the goodwill and purchase price for the acquisition of Rogers Inc. The following data are available for Rogers Inc.: Net Income P1,200,000 1,500,000 2.100,000 2,200,000 500,000 600,000 900,000 Estimated remaining life 5 3 4 Net Assets P6,400,000 8,600,000 8,800,000 9,000,000 4. How much is the average excess earnings? 5. How much is the goodwill? It was agreed that goodwill should be measured by capitalizing excess earnings at 20% with normal return on average net assets at 18%. Determine the following as a result of your audit: 1. How much are the total intangibles initially recognized for 2023? 2. How much is the amortization expense recognized in 2023? 3. How much is the carrying value of all identifiable intangibles on December 31, 2023? Kenny Inc., had the following information for intangible assets for year under audit. The following were noted during the period: Note 1: Identifiable assets Kenny Inc. acquired the net assets of Bee Inc. on June 30, 2023 in a business combination. The cost of acquisition is P500,000 greater that the total book value of the company's identifiable net assets. The book value of the company's identifiable assets approximates their fair values except for the following: Patent Customer lists Franchise Book value Year 2019 250,000 750,000 600,000 2020 2021 2022 Fair value Note 2: Non identifiable assets Kenny Inc. engaged your services to compute the goodwill and purchase price for the acquisition of Rogers Inc. The following data are available for Rogers Inc.: Net Income P1,200,000 1,500,000 2.100,000 2,200,000 500,000 600,000 900,000 Estimated remaining life 5 3 4 Net Assets P6,400,000 8,600,000 8,800,000 9,000,000 4. How much is the average excess earnings? 5. How much is the goodwill? It was agreed that goodwill should be measured by capitalizing excess earnings at 20% with normal return on average net assets at 18%. Determine the following as a result of your audit: 1. How much are the total intangibles initially recognized for 2023? 2. How much is the amortization expense recognized in 2023? 3. How much is the carrying value of all identifiable intangibles on December 31, 2023?
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Related Book For
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
Posted Date:
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