GUILARAN, KERR JOHN B.BSA51KB1 Problem 14-2 1. Computation of Goodwill/Gain on Acquisition: Acquisition Cost P Less: Fair Value of Net Assets Gain on Acquisition 565,000 670,000 P (105,000) 2. Journal Entries: Cash & Receivables (CAT Corp.) Inventory Buildings & Equipment Patent Accounts Payable Gain on Acquisition Cash (DOG Company) P 50,000 150,000 300,000 200,000 30,000 105,000 565,000 To record the acquisition of the net assets of CAT Corporation Acquisition Expense Cash P 5,000 5,000 To record acquisition-related costs Problem 14-4 1. Computation of Goodwill/Gain on Acquisition: Acquisition Cost P Less: Fair Value of Net Assets Goodwill P 600,000 505,000 95,000 2. Journal Entries: Cash Accounts Receivable Inventory Land P 60,000 100,000 115,000 70,000 000 .025.000) P 1.000 420.000 P 140.000 1.000 18. Computation of Goodwill/Gain on Acquisition: Acquisition Cost (P40) P Less: Fair Value of Net Assets 600.000 Acquisition Cost (P20) P Less: Fair Value of Net Assets 300.Buildings & Equipment Goodwill Accounts Payable Bonds Payable Common Stock (P10 par) Additional Paid-in Capital 350.000 (200.000 485.000) 180.000 450.000 (200.000 420.000 480.050.000 400.000 520.000 180.000 485.000) 2.000 120.000 P 140.000 P 350.000 250.000 P 2.000 95.050.000 10.000 1.000 Goodwill P 180.000 645.000 645.000 To record the acquisition of the net assets of Tan Company Acquisition Expense Additional Paid-in Capital Cash P 10.845.000 28.000 550.000 To record acquisition-related costs Problem 14-6 1.000 450. Combined Balance Sheet After Acquisition P40/share Cash and receivables Inventory Building and equipment Accumulated depreciation Goodwill TOTAL ASSETS Accounts payable Bonds payable Common stock P10 Par value Additional paid-in capital Retained Earnings (including gain from acquisition) TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY P20/share P 350.000 Gain on Acquisition P (120. 800.000 / 125. Increase in common stock (P240. Dollar’s Transport Comparative Statement of Comprehensive Income: Revenue 2.000 (200.000 Net Income Earnings per share P 5.000.000 500.000 (55.52 Earnings per share 2013: P 700.000 – P60.000 / 125.000 Earnings per share 2012: P 565.000 2012 2013 P 1.000) P 565.000 Net Income 2012: P 620.60 2011 P 1.52 Revenue for 2012: P 2.000 P 565.000 Increase in APIC (P420.000 P 1.100.000 Problem 14-8 1.00 700.P 2. Computation of Goodwill/Gain on Acquisition: Acquisition Cost P Less: Fair Value of Net Assets Goodwill P 2.025.000) P 40.000) P 1.845.000 360.800.000 P .000 2.000 P 4.400.000 – P200.000 shares = P 5.400.000 200.000) Value of shares issued 400.000 shares = P 4.200.000 P 5.60 Problem 14-10 a.000 2. 130.000 .000 Total assets of Subic before acquisition 650.000 P 50 Problem 14-12 1) Liability from contingent consideration Loss on contingent payment Cash To record the payment of the Contingent Liability 80. Par value of common stock after acquisition P 240.000 Number of shares issued Market price per share ÷ 8.000 c.b.000 Total fair value of assets of Clark before combination P 480.000 40.000 shares Value of shares computed in P 400. Total assets of Subic after acquisition P1.000 Par value of common stock before acquisition 200.000 120. 8.000 Divided by par value per share ÷ P5 Number of shares issued d.000 Par value of common stock issued P 40. 00 340000 10 60.00060.00 50. a.000.00 400.00 2.000 100000 40.000 400.00 Additional shares to be issued 100.000 shares P800.00 50.000 P 2.000. As a rule.000 6.000.000 To record issuance for additional stocks issued Average Income Less Estimated Recoverable Amount Total Carrying Amount Divide Fair Value Of Goodwill Shares to be Issued Goodwill Carying Amount Impairment Loss on Goodwill ( 110.000. P1 par 110.00 2.000 Problem 14-14 1.000 To record the issuance for additional stocks issued Deficiency (P12 – P8) x 200. Goodwill is considered to be impaired only if carrying amount of the unit’s net assets (including goodwill) exceeds the recoverable amount of the unit.) .000. b.00 Average Income Less Total Multiply Cash Payment Additional paid in capital Common stock.) The goodwill is not impaired. Computation of Goodwill/Gain on Acquisition: Acquisition Cost P Less: Fair Value of Net Assets 500.00 60.00 6.000 Goodwill 100.00 120.000.000.000 100.000.000 ) (3) Additional paid in capital Common stock.000.000 Divided by fair value per share 8. P1 par 100.2011 Income 2012 Income Total Income Divide Average Income (2) 100.00 110.00 220.000 6.000.000.00 120. 000 Goodwill 40.Journal Entry: Goodwill Impairment Loss 40.000 To record the impairment of Goodwill .