1. **Problem Statement:** Calculate the adjusted goodwill on August 31, 2023, for LUCAS Corporation's acquisition of DYLAN Corporation. 2. **Formula for Goodwill:** $$\text{Goodwill} = \text{Consideration Transferred} + \text{Fair Value of Non-controlling Interest} + \text{Fair Value of Previously Held Equity Interest} - \text{Fair Value of Net Identifiable Assets Acquired}$$ 3. **Step 1: Calculate Consideration Transferred at Acquisition Date** - Shares issued: $30,000 \times 25 = 750,000$ - Notes payable: $180,000$ - Contingent consideration (expected value): $120,000 \times 0.30 = 36,000$ Total consideration transferred: $$750,000 + 180,000 + 36,000 = 966,000$$ 4. **Step 2: Calculate Fair Value of Net Identifiable Assets of DYLAN** Sum of fair value of assets: $$24,000 + 48,000 + 72,000 + 240,000 + 360,000 + 300,000 + 60,000 = 1,104,000$$ Sum of fair value of liabilities: $$72,000 + 168,000 = 240,000$$ Net identifiable assets: $$1,104,000 - 240,000 = 864,000$$ 5. **Step 3: Calculate Initial Goodwill** $$966,000 - 864,000 = 102,000$$ 6. **Step 4: Adjust Contingent Consideration on August 31, 2023** New expected value: $60,000$ Difference from initial estimate: $$60,000 - 36,000 = 24,000$$ 7. **Step 5: Adjust Goodwill** Initial goodwill $102,000$ plus increase in contingent consideration $24,000$: $$102,000 + 24,000 = 126,000$$ **Final Answer:** **Adjusted goodwill on August 31, 2023 is P126,000.**