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High Company purchased for cash at P50 per share all 150,000 ordinary shares outstanding of another entity. The statement of financial position of the acquiree on the date of acquisition showed net assets with a carrying amount of P6,000,000.
The fair value of property, plant and equipment on same date was P800,000 in excess of carrying amount.
What amount should be recorded as goodwill on the date of purchase?
a. 1,500,000
b. 800,000
c. 700,000
d. 0
Casanova Company purchased another entity for P5,000,000 cash. The following carrying amount and fair value were associated with this acquisition:
Carrying amount Fair value
Accounts receivable 2,000,000 2,000,000
Inventory 1,000,000 500,000
Government contact 0 1,000,000
Equipment 400,000 500,000
Short-term loan payable (2,000,000) (2,000,000)
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Net assets 1,400,000 2,000,000
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The fair value associated with the government contract of the acquiree is not based on any legal or contractual relationship. In addition, for obvious reason, there is no open market trading for an intangible asset of this sort.
What is the goodwill arising from the acquisition?
a. 3,000,000
b. 3,600,000
c. 4,000,000
d. 0
At the current year-end, Star Company purchased for P30 per share all 200,000 of Moon Company’s outstanding shares. On this date, the acquiree’s statement of financial position showed net assets of P5,000,000.
Additionally, the fair value of the acquiree’s identifiable assets on this date was P400,000 in excess of the carrying amount.
In the statement of financial position, what amount should be reported as goodwill as a result of the acquisition?
a. 1,000,000
b. 400,000
c. 600,000
d. 350,000
Meck Company is considering the acquisition of another entity. The following data relate to the acquiree:
Shareholders’ equity 5,000,000
Earnings for prior three years 1,500,000
The acquiree has a valuable patent which is not recorded. If the entity is sold, the patent would be transferred to the buyer for P500,000. Other assets are properly appraised. The patent has a remaining life of 5 years. The earnings of the entity are expected to increase 10% more than the average earnings of the past three years before taking into consideration the amortization of the patent cost.
Compute for the goodwill under the following methods:
1. Average future earnings are capitalized at 8%
2. Goodwill is measured at the average excess earnings capitalized at 10% with normal rate at 8%.
3. Goodwill is measured at the present value of the average excess earnings discounted at 10% for four years with normal rate of 8%. The present value of an ordinary annuity of 1 for 4 years at 10% is 3.17.
Prepare a list of twelve (12) deductions shown on the return that you want to audit. For each of these deductions that you list, provide a one or two sentences for each explaining why you have identified the deduction. In other words, explain why you feel there is a possibility the deduction may be improper/non-deductible, excessive/not reasonable, etc.
Mr. Ramu has the following transactions in the month of July.
Record them into the journal and show postings in the ledger and balance the accounts.
July 1st : Ramu started business with a capital of 75,000
1st : Purchased goods from Manu on credit 25,000
2nd : Sold goods to Sonu 20,000
3rd : Purchased goods from Meenu 15,000
4th : Sold goods to Tanu for cash 16,000
5th : Goods retuned to Manu 2,000
6th : Bought furniture for 15,000
7th : Bought goods from Zenu 12,000
8th : Cash paid to Manu 10,000
9th : Sold goods to Jane 13,500
10th : Goods returned from Sonu 3,000
11th : Cash received from Jane 5,500
12th : Goods taken by Ramu for domestic use 3,000
13th : Returned Goods to Zenu 1,000
14th : Cash received from Sonu 12,000
15th : Bought machinery for 18,000
16th : Sold part of the furniture for 1,000
17th : Cash paid for the purchase of bicycle for Ramu's son 1,500
19th : Cash sales 15,000
20th : Cash purchases 13,500
I have 3 accountng questions that will open tmw for a test on FEB 10TH 2021 AT 8 AM EST I NEED HELP PLEASE
Instructions:
- Use introduction, body paragraph, and conclusion headings
- Your paper should be 5 to 7 pages in length
Discuss on the topic, financial transactions and accounting records.
A and B are partners in an equal general partnership. A has a basis of $30,000
in his partnership interest. B has a basis of $10,000 in her partnership interest.
What is the effect of each of the following events on the basis of each partner's
partnership interest? When is the effect taken into account?
On Ist January 2017 for goods sold, Ramesh drew a Bill of Exchange on Mahesh for RS. 6,000 for a period of 3 months. Mahesh accepts it and returns to Ramesh. Ramesh then endorses it to Dinesh on Ist February 2017. The bill is then discounted by Dinesh on the same date with his banker at 5% p.a.
On the due date, the bill is dishonoured. The Bank paid Rs. 25 as Noting Charges Pass the necessary journal entries in the books of all the three parties.
