On January 1, 2020, PEARLS Corporation acquired the identifiable net assets of START UP Company. On this date, the identifiable assets acquired and liabilities assumed have fair values of P6.4M and P3.6M, respectively. PEARLS incurred the following acquisition-related costs: legal fees - 40,000; due diligence costs - 400,000 and general admin costs - 80,000. As consideration, PEARLS issued 8,000 shares with par value and fair value per share of P400 and P500 respectively. Costs of registering and listing the shares amounted to P160,000. How much is the goodwill on the business combination, assuming both companies qualified as SME?

On January 1, 2020, PEARLS Corporation acquired the identifiable net assets of START UP Company. On this date, the identifiable assets acquired and liabilities assumed have fair values of P6.4M and P3.6M, respectively. PEARLS incurred the following acquisition-related costs: legal fees - 40,000; due diligence costs - 400,000 and general admin costs - 80,000. As consideration, PEARLS issued 8,000 shares with par value and fair value per share of P400 and P500 respectively. Costs of registering and listing the shares amounted to P160,000. How much is the goodwill on the business combination, assuming both companies qualified as SME?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 60P

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