GOOD Company is into paper-manufacturing business while LUCK Company is producing different kinds of drawing pencil. On June 1, 2017, GOOD Company decided to purchase 160,000 shares of the total outstanding shares of LUCK Company for cash amounting to P425,000. At that time, the balance sheet of LUCK Company includes a current assets of P180,000 and non-current assets of 320,000 while liabilities of P100,000, common stock of 200,000, additional paid in capital of 100,000 and retained earnings of P100,000.   

 

There were no difference between the book values and fair values of the assets and liabilities of LUCK Company at the date of acquisition and any excess cost will be attributable to either the Goodwill or Bargain Purchase Gain.

 

In addition, the following information was provided by both companies:

1. On August 6, 2017, GOOD Corporation sold P35,000 of goods to LUCK Company with a gross profit rate of 15%. LUCK Company also sold P20,000 goods to GOOD Company and earned a gross profit of P4,000. The latter transaction showed a sales invoice dated, April 9, 2018.
2. GOOD purchased goods amounting to P30,000 on November 14, 2018. It reveals that the cost of this product is only P22,500. On February 14, 2019, LUCK Company purchased P32,000 worth of goods from GOOD company. The company employed a gross profit rate of 22% on this transaction.
3. The ending inventory of GOOD Corporation on May 31, 2018 includes P3,500 of goods coming from its purchase from LUCK Company. At the same date, there were P9,000 remaining inventory on LUCK’s purchase from GOOD.
4. There is an unsold intercompany merchandise in the inventory of LUCK amounting to P6,000 while the ending inventory of GOOD contains P3,500 merchandise purchased from LUCK.
5. On June 1, 2019, GOOD owed LUCK P10,000, and LUCK owed GOOD P5,000 as a result of the intercompany sales.
6. GOOD paid P25,000 in cash dividends on March 20,2018 and 2019, LUCK paid its first cash dividend on March 10, 2019, giving each share of outstanding common stock a P0.15 cash dividend.

 

The trial balances of the two companies as of May 31, 2019, follow:

 

	GOOD Corporation		LUCK Company
	Dr	Cr	Dr	Cr
Cash	216,200		44,300
Accounts Receivable, net	290,000		97,000
Merchandise Inventory	310,000		80,000
Investment in LUCK Company	425,000
Property and Equipment, net	1,991,000		340,000
Goodwill	60,000
Accounts Payable		642,200		106,300
Common Stock, P0.50 par		250,000
Common Stock, P1.00 par				200,000
Additional Paid In Capital		1,250,000		100,000
Retained Earnings		1,105,000		140,000
Sales		880,000		630,000
Dividend Income		24,000
Cost of Goods Sold	704,000		504,000
Other expenses	130,000		81,000
Dividends Declared	25,000		30,00
Totals	P4,151,200	P4,151,200	P 1,176,300	P1,176,300

Question 10. How much is the goodwill in the 2019 consolidated financial statements?

 Question 11. What is the amount of the 2019 consolidated asset?