Answer:
Journal Entry
Dr. Contingent Consideration Liability $500,000
Cr. Goodwill $500,000
Explanation:
It is assumed that the decline in the fair value is the correction of the acquisition entry. It means due to this event the consideration liability and goodwill are overstated we need to rectify the balances.
Hence,
The contingent consideration liability will be debited to reduce the liability and goodwill will also be decreased by crediting the goodwill account.
My best estimate is 23% or lower.
Answer:
Price Floor led Excess Supply can be solved by : Preserving goods Buffer Stock ; or processing goods to increase their shelf life (in case of perishable goods like Milk)
Explanation:
Unregulated markets are at equilibrium where : market demand , market supply are equal ; and downward sloping demand curve , upward sloping supply curve intersect.
Price Floor is minimum mandated price set by government, below which a good can't be sold in the market. It is usually set above equilibrium price, to protect interest of sellers. Example : Minimum Support Price as minimum agricultural goods price to protect interest of farmers, Given Milk Price floor case.
Price Floor creates artificially higher prices ; so increases supply, decreases supply & hence creates Excess Supply. Government can solve this excess supply by preserving stock supply for contingent times , eg - maintaining buffer stock. If the good is of perishable nature, as given milk case : it should be processed further to increase its shelf life, eg - cheese, such that the stock supply can be released at a slower pace.
This idea is most consistent with LAISSEZ FAIRE type of management in which the employees are allowed to use their ideas and creativity to flourish in their areas of specialization. The management takes a back seat role in the company and only offer guidance when needed.
