3/5/23, 11:44 PM ACC 312: Activity 1

ACC 312: Activity 1

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Part 1: Business Combination (PFRS 3)

Eureka will record how much for acquired Intangible Assets form the * 1 point

purchase of Aquaria Inc?

168,000

158,000

150,000

58,000

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3/5/23, 11:44 PM ACC 312: Activity 1

 
On Sarawat’s June 1 balance sheet, how much is reported for goodwill? * 1 point

320,000

120,000

80,000

20,000

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3/5/23, 11:44 PM ACC 312: Activity 1

How should the difference between the book value of Alarcon’s net assets * 1 point
and the consideration paid by Lazaro to be considered?

Goodwill: P0; Increase in assets: P234,000

Goodwill: P0; Increase in assets: P312,000

Goodwill: P338,000; Increase in assets: P234,000

Goodwill: P338,000; Increase in assets: P78,000

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3/5/23, 11:44 PM ACC 312: Activity 1

The Sword Company acquired 100% of the Shield Company for a * 1 point

consideration transferred of P112 million. At the acquisition date the

Gain on bargain purchase of P8 million recognized in other comprehensive income

Gain on bargain purchase of P8 million deducted from other intangible assets

Gain on bargain purchase of P8 million recognized in profit or loss

Goodwill of P12 million as an intangible asset

Palkia issues common stock to acquire all the assets of the Dialga * 1 point
Company on January 1, 2017. There is a contingent share agreement,
which states that if the income of the Dialga Division exceeds a certain
level during 2017 and 2018, additional shares will be issued on January 1,
2019. The impact of issuing the additional shares is to

increase the price assigned to fixed assets

have no effect on asset values but to reassign the amounts assigned to equity
accounts

reduce retained earnings

record additional goodwill

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3/5/23, 11:44 PM ACC 312: Activity 1

On January 1, 2018, Honey Mahogany Company purchased the net assets * 1 point
of the Violet Chachki Company by issuing 100,000 shares of its P1 par
value stock when the fair value of the stock was P6.20. It was further
agreed that Honey Mahogany would pay an additional amount on January
1, 2020, if the average income during the 2-year period of 2018-2019
exceeded P80,000 per year. The expected value of this consideration was
calculated as P184,000; the measurement period is one year. What amount
will be recorded as goodwill on January 1, 2018?

Zero

100,000

180,000

284,000

Refer to previous problem, assuming that on August 1, 2018 the contingent * 1 point
consideration happens to be P170,000, what amount will then be recorded
as goodwill in the said date?

Zero

86,000

166,000

270,000

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3/5/23, 11:44 PM ACC 312: Activity 1

Refer to previous problem, assuming that on January 1, 2020, the date of * 1 point
settlement of the contingent consideration clause agreement for P175,000,
the entry should be:

Dr. Estimated liability for contingent consideration 170,000; Dr. Loss on estimated
contingent consideration 5,000; Cr. Cash 175,000

Dr. Estimated liability for contingent consideration 175,000; Cr. Cash 175,000

Dr. Estimated liability for contingent consideration 184,000; Cr. Loss on estimated
contingent consideration 9,000; Cr. Cash 175,000

No entry required

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