SHOW YOUR SOLUTIONS

High Company purchased for cash at P50 per share all 150,000 ordinary shares outstanding of another entity. The statement of financial position of the acquiree on the date of acquisition showed net assets with a carrying amount of P6,000,000.

The fair value of property, plant and equipment on same date was P800,000 in excess of carrying amount.

What amount should be recorded as goodwill on the date of purchase? a. 1,500,000 b. 800,000 c. 700,000 d. 0