The partners of the Liwa Engineering Company have decided to terminate the business. The balances of the company's accounts prior to the liquidation are given in the Table 1. Table 1 Book value in OMR...

Extracted text: The partners of the Liwa Engineering Company have decided to terminate the business. The balances of the company's accounts prior to the liquidation are given in the Table 1. Table 1 Book value in OMR Cash 28,500 Plant assets (net) 75,000 Machinery and equipment (net) 2,500 Inventories 1,300 Liabilities 47,300 Capital, Partner 1 36,000 Capital, Partner 2 24,000 Additional information: The partner 1 and the partner 2 share profits and losses in the ratio 7:3. In the process of liquidation, the non-cash assets are sold for OMR 125,000. Required: A. You are asked to prepare a schedule of cash payments (Table 2), showing how cash will be distributed between the partners as it becomes available. B. Based on the information above (Table 2 – Schedule of Cash Payments), journalize the transactions.


Extracted text: Additional information: The fair value of the assets acquired and the liabilities assumed were determined as follows: PPE (net) OMR 250,000 Accounts receivable (net) OMR 100,000 Liabilities OMR 70,000 Required: A. Case A: Calculate goodwill / bargain purchase and disclose the financial information on the business combination assuming that the amount of cash paid by The Muscat Trade Company was OMR 500,000. B. Case B: Calculate goodwill / bargain purchase and disclose the financial information on the business combination if the amount paid was only OMR 200,000. C. Based on the details provided in cases A and B above, explain when goodwill arises on acquisition in business combinations.