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(2/2 Points) : Correct Answers: Expensed
(2/2 Points) : Correct Answers: Expensed
Assembled workforce, potential contracts and other unidentifiable assets are not
recognized in identifying the net identifiable assets of the acquiree in a business
combination. If the goodwill computed by Potency Co. in acquiring Vita Inc. is
P700,000 including an unidentifiable assets, what is the adjusted amount of goodwill
of Potency if the unidentifiable asset is P23,000?Single line text.
(2/2 Points)
677,000
2.The acquiree's unidentifiable asset is recognized by the acquirer even if the related
costs has already been ___________.Single line text.
(0/1 Point)
Correct answers: expensed
3.The acquirer is required to recognized acquisition-related costs, whether direct or
indirect that are related in the period in which these costs are incurred. Legal and
accounting fees are recorded as an _________ in the book.Single line text.
(1/1 Point)
Expense
4.A gain on bargain purchase is recognized through the following statement. Which is
not untrue?Single choice.
(0/4 Points)
Consideration transferred of P10 less fv of assets of P10 and fv of liabilities of P8
Correct answers: 930,866
6.In acquiring the assets and liabilities of the acquiree, Evergreen Co. estimated the
cost of exiting activities of the acquiree including relocation costs amounting to
P700,000. For a consideration of P2,000,000, if the goodwill recognized in this
transaction amounted to P300,000, the computation of goodwill in this transaction
ignored the __________.Single line text.
(0/5 Points)
Correct answers: 1,555,000
8.When market terms are favorable for P50,000 for Tic Company, the renting out of
the equipment of Toc Inc. revealed a goodwill of P400,000. Who is the lessee's entity
in the transaction?Single line text.
(1/1 Point)
Tic Compan
9.Assume in no. 8 the fair value of the liabilities assumed is P750,000, what is the
amount of identifiable assets acquired?Single line text.
(0/3 Points)
Correct answers: 1,100,000
10. Which of the following statement is true in an operating lease transactions of
determining goodwill?Single choice.
(0/5 Points)
An intangible asset is recognized due to favorable terms for the lessor
A liability recognized by the acquirer indicated a favorable term for the lessee
Favorable terms increases the net identifiable assets acquired not the assets acquired
12.ITEMS 12 to 14 are based on the following information. Ignore the peso sign in
giving your answers. The Magi Co. acquired Sarap Inc. through an exchange of
common shares. Magi's share was trading at P20 per share at the time of exchange.
The following are the selected information available. Par value of shares outstanding
before acquisition-P200,000; After acquisition-P250,000 Additional paid-in capital
before acquisition-P350,000; After acquisition-P550,000 Compute for the number of
shares issued at the time of exchange.Single line text.
(5/5 Points)
12,500
14.What is the amount of the net assets acquired if a goodwill of P56,000 was
recorded?Single line text.
(5/5 Points)
194,000
15.Sub Inc. was acquired at a bargain price. The sum of the fair values of identifiable
assets acquired and liabilities assumed exceeded the costs. After elimination of
goodwill, the negative goodwill still exists. The proper accounting treatment is to
report the amount asSingle choice.
(2/2 Points)
paid-in capital
deferred credit
ordinary gain
extra-ordinary gain
Correct answers: ordinary gain
16.Which of the following statement support a business combination wherein an
investor acquires additional interest to obtain control?Single choice.
(2/2 Points)
combination achieved through a contract
Maybe
correct
Unsure
Your answer to question 17 is wrong. Correct answers: correct
18.The acquisition-related costs are either expensed or deducted from share premium.
Which is expensed? Cost of issuing equity or cost of issuing debt security?Single line
text.
(0/1 Point)
Correct answers: 60
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