On January 1, 2020, Blue company purchased X company for P25 Million. At such date, X Company had total assets of P 24,000,000 and total liabilities of P3,000,000. The excess payment was appropriately recognized as goodwill and is expected to have a benefit of 10 years. During the year 2021, Blue spent an additional P1,000,000 on expenditures designed to maintain goodwill. Due to these expenditures, Blue estimated that the benefit period of goodwill had increased an additional 10 years. What amount of goodwill should Blue Company report on December 31, 2021?
On January 1, 2020, Blue company purchased X company for P25 Million. At such date, X Company had total assets of P 24,000,000 and total liabilities of P3,000,000. The excess payment was appropriately recognized as goodwill and is expected to have a benefit of 10 years. During the year 2021, Blue spent an additional P1,000,000 on expenditures designed to maintain goodwill. Due to these expenditures, Blue estimated that the benefit period of goodwill had increased an additional 10 years. What amount of goodwill should Blue Company report on December 31, 2021?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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5. On January 1, 2020, Blue company purchased X company for P25 Million. At such date, X Company had total assets of P 24,000,000 and total liabilities of P3,000,000. The excess payment was appropriately recognized as goodwill and is expected to have a benefit of 10 years. During the year 2021, Blue spent an additional P1,000,000 on expenditures designed to maintain goodwill. Due to these expenditures, Blue estimated that the benefit period of goodwill had increased an additional 10 years.
What amount of goodwill should Blue Company report on December 31, 2021?
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