On October 1, 2020, Majinbu Company is interested in the business of Choco Company. An agreement...

 

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On October 1, 2020, Majinbu Company is interested in the business of Choco Company. An agreement was reached on January 1, 2021 and the net assets were exchanged on this date for the following: 100,000 shares in Majinbu Company, par P10, market value, P25 P4,000,000 cash, P1,000,000 to be paid on date of exchange and the balance to be paid on January 1, 2022, market rate of interest is 10% Non-cash assets, book value of P200,000, fair market value of P250,000 On January 1, 2021, the book value of the net assets of Choco Company is P4,850,000 and its fair value is P5,000,0DO. What is the amount of goodwill to be recognized upon acquisition? On October 1, 2020, Majinbu Company is interested in the business of Choco Company. An agreement was reached on January 1, 2021 and the net assets were exchanged on this date for the following: 100,000 shares in Majinbu Company, par P10, market value, P25 P4,000,000 cash, P1,000,000 to be paid on date of exchange and the balance to be paid on January 1, 2022, market rate of interest is 10% Non-cash assets, book value of P200,000, fair market value of P250,000 On January 1, 2021, the book value of the net assets of Choco Company is P4,850,000 and its fair value is P5,000,0DO. What is the amount of goodwill to be recognized upon acquisition?

Answer rating: 100% (QA)

To calculate the amount of goodwill to be recognized upon acquisition we need to first determine the ... View the full answer