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    Advanced Accounting - Dayag 2015 - Chapter 15 - Multiple Choice Solution (26-28)

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    John Carlos Doringo
    This document contains multiple choice problems and solutions regarding the calculation of goodwill in a business combination. Problem 26 calculates goodwill using the full goodwill method, resulting in goodwill of P40,000. Problem 27 calculates goodwill using both the full and partial goodwill methods, with full goodwill of P40,000 and partial goodwill of P28,000. Problem 28 provides an equation to calculate total assets of the combined entities.

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    Advanced Accounting - Dayag 2015 - Chapter 15 - Multiple Choice Solution (26-28)

    Uploaded by

    John Carlos Doringo
    124 views1 page
    This document contains multiple choice problems and solutions regarding the calculation of goodwill in a business combination. Problem 26 calculates goodwill using the full goodwill method, resulting in goodwill of P40,000. Problem 27 calculates goodwill using both the full and partial goodwill methods, with full goodwill of P40,000 and partial goodwill of P28,000. Problem 28 provides an equation to calculate total assets of the combined entities.

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    Advanced Accounting by Dayag 2015 (Chapter 15) Multiple Choice Solution (26-28)

    Original Title

    Advanced Accounting --- Dayag 2015 --- Chapter 15 --- Multiple Choice Solution (26-28)

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    This document contains multiple choice problems and solutions regarding the calculation of goodwill in a business combination. Problem 26 calculates goodwill using the full goodwill method, resulting in goodwill of P40,000. Problem 27 calculates goodwill using both the full and partial goodwill methods, with full goodwill of P40,000 and partial goodwill of P28,000. Problem 28 provides an equation to calculate total assets of the combined entities.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    124 views1 page

    Advanced Accounting - Dayag 2015 - Chapter 15 - Multiple Choice Solution (26-28)

    Uploaded by

    John Carlos Doringo
    This document contains multiple choice problems and solutions regarding the calculation of goodwill in a business combination. Problem 26 calculates goodwill using the full goodwill method, resulting in goodwill of P40,000. Problem 27 calculates goodwill using both the full and partial goodwill methods, with full goodwill of P40,000 and partial goodwill of P28,000. Problem 28 provides an equation to calculate total assets of the combined entities.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    of 1

    Chapter 15

    Multiple Choice Problems


    26. c
    Full-goodwill:
    Fair value of Subsidiary:
    Consideration transferred P150,500
    Add: FV of NCI **64,500 P215,000
    Less: BV of SHE of SS (P50,000 + P90,000) x 100% 140,000
    Allocated excess P 75,000
    Less: Over/under valuation of A and L: Inc. (Dec.)
    Inventory (P70,000 – P85,000) x 100% P 15,000 
    Land (P25,000 – P45,000) x 100% 20,000 35,000
    Goodwill – full P 40,000 
    **given amount, but it should not be lower than the fair value of SHE – subsidiary amounting to
    P52,500 computed as follows :
    FV of SHE of SS:
    Book value of SHE of SS (P50,000 + P90,000)…………….P 140,000
    Adjustments to reflect fair value (P15,000 + P20,000)… 35,000
    FV of SHE of SS……………………………………………… P 175,000
    Multiplied by: NCI%.......................................................... 30%
    FV of NCI (partial)……………………………………………..P 52,500
    27. b
    Total Assets of Power Corp. P 791,500 
    Less: Investment in Silk Corp.    (150,500)
    P 641,000 
    Book value of assets of Silk Corp. 405,000 
    Book value reported by Power and
    Silk P1,046,000 
    Increase in inventory (P85,000 - P70,000) 15,000 
    Increase in land (P45,000 - P25,000) 20,000 
    Goodwill (full)     40,000 
    Total assets reported P1,121,000 

    If partial-goodwill:
    Total Assets of Power Corp. P 791,500 
    Less: Investment in Silk Corp.    (150,500)
    P 641,000 
    Book value of assets of Silk Corp. 405,000 
    Book value reported by Power and
    Silk P1,046,000 
    Increase in inventory (P85,000 - P70,000) 15,000 
    Increase in land (P45,000 - P25,000) 20,000 
    Goodwill (partial)     28,000 
    Total assets reported P1,109,000 
    28. d P701,500 = (P61,500 + P95,000 + P280,000) + (P28,000 + P37,000
    + P200,000)

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