Professional Documents
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13-1: c
13-2: a
20-3: d
Average rate for the year is used in translating depreciation expense because this is more
reasonable estimation than the rate when the related asset was acquired (P4.80).
19-5: a.
CHAPTER 20
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13-1: c
13-2: a
20-3: d
Average rate for the year is used in translating depreciation expense because this is more
reasonable estimation than the rate when the related asset was acquired (P4.80).
19-5: a.
CHAPTER 20
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13-1: c
13-2: a
20-3: d
Average rate for the year is used in translating depreciation expense because this is more
reasonable estimation than the rate when the related asset was acquired (P4.80).
19-5: a.
CHAPTER 20
loss on interest
Based on P 3,2000,000 P 120,000
Based on P 300,000,000 (P3,000,000x10%x4/12) 100,000 20,000
Forex loss P (220,000)
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19-5: a.
CHAPTER 20
20-1: b
20-2: b
20-3: d
Average rate for the year is used in translating depreciation expense because this is more
reasonable estimation than the rate when the related asset was acquir loss on interest
Based on P 3,2000,000 P 120,000
Based on P 300,000,000 (P3,000,000x10%x4/12) 100,000 20,000
Forex loss P (220,000)
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19-5: a.
CHAPTER 20
20-1: b
20-2: b
20-3: d
Average rate for the year is used in translating depreciation expense because this is more
reasonable estimation than the rate when the related asset was acquir loss on interest
Based on P 3,2000,000 P 120,000
Based on P 300,000,000 (P3,000,000x10%x4/12) 100,000 20,000
Forex loss P (220,000)
19-5: a.
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CHAPTER 20
20-1: b
20-2: b
20-3: d
Average rate for the year is used in translating depreciation expense because this is more
reasonable estimation than the rate when the related asset was acquir loss on interest
Based on P 3,2000,000 P 120,000
Based on P 300,000,000 (P3,000,000x10%x4/12) 100,000 20,000
Forex loss P (220,000)
19-5: a.
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Direct
00
Total 500,000
Less fair value of net assets acquired (P360,000 – P40,000) 320,000
Goodwill P 180,000
15-3: c
CHAPTER 15
15-1: d
15-2: a
15-2: a
15-3: c
15-1: d
15-2: a
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15-3: c
CHAPTER 15
13-1: c
13-2: a
13-3: b
13-4: a
CHAPTER 14
14-1: d
14-2: b
14-3: c
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14-4: d
14-5:
14-11: d
Consideration given:
Cash P270,000
Stocks issued at fair value 330,000
Total P600,000
Less: fair value of net assets acquired:
Cash P40,000
Inventories 100,000
Other current assets 20,000
Plant assets (net) 180,000
Current liabilities (30,000)
Other liabilities (40,000) 270,000
Goodwill P330,000
14-12: d
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14-13: a
14-14: c
14-15: b
14-16: c, Under the acquisition method assets are recorded at their fair values (P225.000)
14-17: d
14-18: d, net assets are recorded at their fair values; No APIC is recorded and stock acquisition
costs of P5,000 is recognized (P405,000 less P400,000).
14-19: a
14-20: d
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Goodwill P 200,000
Fair value of net assets acquired 1,600,000
Price paid P1,800,000
14-21: c
14-22: a
14-23: a
B Company C Company
Consideration given P4,400,000 P638,000
Less: fair value of net assets acquired 4,150,000 370,000
Goodwill P 250,000 P268,000
14-24: a
A Company 5,250,000
B Company 6,800,000
C Company 900,000
Cash paid for acquisition costs (P20,000 + P10,000) (30,000)
Goodwill (see 14-23) 518,000
Total assets after combination 13,438,000
14-25: a
Stockholders equity before acquisition – A Company P1,300,000
Capital stock issued at par (229,000 shares x P10) 2,290,000
Additional paid-in-capital [(229,000 x 12) – 10,000] 2,738,000
Other acquisition cost (reduction from retained earnings) (20,000)
Stockholders equity after acquisition 6,308,000
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14-26: 1. a
Equipment: P180,000/5 yrs. = P36,000
Building: P550,000/20 yrs. = 27,500
Total depreciation P63,500
2. b
Price paid P900,000
Less fair value of net assets acquired:
Current assets P100,000
Land 50,000
Equipment 180,000
Building 550,000
Current liabilities (150,000) 730,000
Goodwill P170,000
14-27: b
Price paid P32 M
Final fair value of net assets 28 M
Goodwill P 4 M
PROBLEMS
Problem 14-1
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Problem 14-2
Problem 14-3
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Goodwill 40,000
Accounts payable 50,000
Common stock, P10 par value 60,000
Additional paid-in capital 480,000
Computation of Goodwill
Price paid (6,000 shares x P90) P540,000
Less: fair value of net identifiable assets acquired
Total assets P550,000
Accounts payable ( 50,000) 500,000
Goodwill P 40,000
Problem 14-4
Cash 60,000
Accounts receivable 100,000
Inventory 115,000
Land 70,000
Building and equipment 350,000
Bond discount 20,000
Goodwill 95,000
Accounts payable 10,000
Bonds payable 200,000
Common stock, P10 par value 120,000
Additional paid-in capital 480,000
Computation of Goodwill
Purchase price (12,000 shares x P50) P600,000
Less: Fair value of net identifiable assets acquired
Total assets P695,000
Total liabilities ( 190,000) 505,000
Goodwill P 95,000
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Problem 14-5
Problem 14-6
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Problem 14-7
ASSETS
Cash and receivables P 110,000
Inventory 142,000
Land 115,000
Plant and equipment P540,000
Less: Accumulated depreciation 150,000 390,000
Goodwill 13,000
Total assets P 770,000
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Problem 14-8
Problem 14-9
Cash 28,000
Accounts receivable 258,000
Inventory 395,000
Long-term investments 175,000
Land 100,000
Rolling stock 63,000
Plant and equipment 2,500,000
Patents 500,000
Special licenses 100,000
Discount on equipment trust notes 5,000
Discount on debentures 50,000
Goodwill 109,700
Allowance for bad debts 6,500
Current payables 137,200
Mortgage payables 500,000
Premium on mortgage payable 20,000
Equipment trust notes 100,000
Debenture payable 1,000,000
Common stock 180,000
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Computation of Goodwill
Price paid (180,000 shares x P14) P2,520,000
Less: fair value of net identifiable assets acquired
Total assets P4,112,500
Total liabilities (1,702,200) 2,410,300
Goodwill P 109,700
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Patents 125,000
Special licenses 95,800
Gain on sale of assets and liabilities 1,189,900
To record sale of assets and liabilities to Peter.
Problem 14-10
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Problem 14-11
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Problem 14-12
Problem 14-13
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Goodwill computation:
Price paid:
Cash P 400,000
Common stock (15,000 shares x P40) 600,000
Contingent consideration (P100,000 x 75%) 75,000
Total price paid 1,075,000
Less: Fair value of net assets acquired
Current assets P 256,000
Non-current assets 660,000
Current liabilities ( 162,000)
Non-current liabilities ( 440,000) 314,000
Goodwill P 716,000
Problem 14-14
(2 – a) No, because the carrying amount of the net assets of the business is less
than the recoverable of the unit.
(2 – b) Yes.
Entry:
Impairment loss 40,000
Goodwill 40,000
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