JJ Company acquired the net assets of GTG Company on January 1, 2019. Below are the account
Question:
JJ Company acquired the net assets of GTG Company on January 1, 2019. Below are the account balances of GTG Company as of January 1, 2019:
Current assets ₱400,000
Equipment 600,000
Land 200,000
Building 1,200,000
Liabilities (320,000)
Net assets ₱2,080,000
JJ Company paid 2.4 million for the net assets of GTG Company. In addition, additional cash payment would be made on January 1, 2021 if the average earnings of GTG Company exceed 100,000 per year. Net income was 200,000 in 2019 and 240,000 in 2020. Assume that the liabilities recorded on January 1, 2019 include an estimated contingent liability recorded at ₱160,000. On December 21, 2019, it was noted that GTG Company may generate revenue more than what is expected, hence, the estimated contingent liability was increased to ₱200,000.
How much goodwill should be recorded as of December 31, 2019?
On July 1, 2011, JPJ Company acquired 100% of the PGTG Company for a consideration transferred of P160 million. At the acquisition date the carrying amount of PGTG's assets was P100 million. At the acquisition date, a provisional fair value of P120 million was attributed to the net assets. An additional valuation received on May 31, 2012 increase this provisional fair value to P135 million and on July 30, 2012, the fair value was finalized at 140 million.
What amount should JPJ present for goodwill in its statement of financial position on December 31, 2012, according the PFRS 3?
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson