14.Liliw Company engaged your services to compute the goodwill in the purchase of Calauan Company which provided the following: Net income Net assets 1,400,000 1,600,000 2,000,000 2002 6,000,000 8,000,000 8,800,000 2003 2004 2005 2,200,000 9,200,000 It is agreed that goodwill is measured by capitalizing excess earnings at 20% with normal return on average net assets at 10%. How much is the purchase price for Calauan Company? a. P14,200,000 b. P18.200.000 c. P13,000,000 d. P17.000.000

14.Liliw Company engaged your services to compute the goodwill in the purchase of Calauan Company which provided the following: Net income Net assets 1,400,000 1,600,000 2,000,000 2002 6,000,000 8,000,000 8,800,000 2003 2004 2005 2,200,000 9,200,000 It is agreed that goodwill is measured by capitalizing excess earnings at 20% with normal return on average net assets at 10%. How much is the purchase price for Calauan Company? a. P14,200,000 b. P18.200.000 c. P13,000,000 d. P17.000.000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 9MC

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13. Karen Company engaged your services to compute for the goodwill in the purchase of another entity which provided the following: Year Net Income Net Assets 2016 Php 1,000,000 Php 3,900,000 2017 Php 1,250,000 Php 4,350,000 2018 Php 1,950,000 Php 4,500,000 Goodwill is measured by capitalizing excess earnings at 25% with normal return on average net assets at 20%. How much is the purchase price?
Naughty Company assembles the following data relative to a certain entity in determining the amount to be paid for net assets and goodwill: Assets at fair value before goodwill 2, 600, 000Liabilities 900, 000Shareholders’ equity 1, 700, 000 Net earnings after elimination of unusual or infrequent items:2008 200, 0002009 230, 0002010 300, 0002011 250, 0002012 270, 000 Required:Calculate the amount of goodwill under the following:1. Average earnings are capitalized at 10%2. A return of 8% is considered normal on net assets at fair value. Excess earnings are capitalized at 15%.3. A return of 10% is considered normal on net assets at fair value. Goodwill is measured at 5 years excess earnings.4. A return of 10% is considered normal on net assets at fair value. Excess earnings are expected to…
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Topic: Intangible Assets (Goodwill) England Company assembled the following data relative to a certain entity in determining the amount to be paid for net assets and goodwill: Assets at fair value before goodwill 2,600,000 Liabilities 900,000 Shareholders' Equity 1,700,000 Net Earnings after elimination of unusual or infrequent items: 2017 200,000 2018 230,000 2019 300,000 2020 250,000 2021 270,000 Required: Calculate the amount of goodwill under the following: 1. Average earnings are capitalized at 10%. 2. A return of 8% is considered normal on net assets at fair value. Excess earnings are capitalized at 15%. 3. A return of 10% is considered normal on net assets at fair value. Goodwill is measured at 5 years excess earnings. 4. A return of 10% is considered…
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