Reference no: EM132762633
Question: On January 1, 2016, William Corp. paid cash of P600,000 for all the outstanding shares of Kate Company. The carrying value of the assets and liabilities of Kate on January 1, 2016 follow:
Accounts Receivable P90,000
Inventory 180,000
Plant & Equipment (net of Accumulated Depreciation) 320,000
Goodwill 100,000
Liabilities 120,000
On January 1, 2016 Kate inventory had a fair value of P150,000 and plant & equipment (net) had a fair value of P380,000. Cost of arranging the combination are as follows: legal fees for combination, P30,000; finder's fee, P50,000; other direct costs, P70,000. Net income of William and Kate for 2016 amounts to P188,000 and P90,000, respectively. William received dividend of P20,000 from Kate during 2016. The PPE has original useful life of 10 years and was already held for 4 years as of date of acquisition. On December 31, 2016,
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