1. Jason Company has recently took over Teague Company at a cost of P16,000,000Jason Company acquired the following assets at fair value:

Land and building	6,500,000
Production machinery	3,200,000
Inventory	2,800,000
Accounts receivable	1,400,000

      In addition Teague Company owned but had not recognized the following:

Trademark	750,000
Patent - for special coating formula	1,000,000

      The amount of goodwill to be recognized arising from the acquisition is

 

 

 2. Jimmy Company engaged you to assist in the acquisition of Photo Company on January 2022.  It was agreed that Photo Company would receive an amount for goodwill based on the capitalization of excess earnings at 60%. 

The following information was taken from the records of Photo Company.

Year	2018	`2019	2020	2021	2022
Net income	250,000	275,000	320,000	360,000	400,000
Net assets	750,000	810,000	890,000	960,000	1,040,000

The normal rate of return on the average net assets in the industry to which Photo Company operates is 15%

 The purchase price for Photo Company is