Image transcription text1. Assume the Petron Company is to acquire Shell Company. Shell has the following balance sheet accountswith their respective Petron values on December 31, 2019 follows: Book Petron Book Petron Value Value ValueValue Cash P P Current Liabilities P P25,000 40,000 40,000 25,000 Marketable 60,000 66,000 … Show more… Show moreA) Determine the goodwill/(gain) to be recorded because of the combination. Prepare the journal entries to record the acquisition of the net assets of Shell Company by Petron Company. Using the same information in Problem 1, assuming that Petron Company issues 25,000 shares of its P1 par value common stock with a market value of P25 each for the net assets of Shell Company.B) Determine the goodwill/(gain) to be recorded because of the combination. Using the same information in No. 1, assuming that Petron Company issues 32,000 shares of its P1 par value common stock with a market value of P20 each for the net assets of Shell Company. Petron also agrees to pay Shell Company P200,000 on January 1, 2022 if the average income during the two-year period for 2020-2021 exceeds P5,000,000 per year. The acquirer estimated that there is a 40% probability of achieving the target income.C) Determine the goodwill/(gain) to be recorded because of the combination.BusinessAccounting
