Complete question:
A company pays $70 million in cash to acquire 70% of the voting stock of another company. The fair value of the non controlling interest at the date of acquisition is $25 million, and the book value of the acquired company is $20 million. There are no revaluations of the acquired company’s identifiable net assets. Goodwill allocated to the non-controlling interest is:
REQUIRED: Assuming U.S. GAAP is used.
a. Calculate the total goodwill
b. How much goodwill is allocated to the controlling interest? What percent of goodwill is allocated to the controlling interest?
c. How much goodwill is allocated to the non-controlling interest? What percent of goodwill is allocated to the non-controlling interest?
Solution:
a. Total goodwill = $70 million + $25 million - $20 million = $75 million
b. Goodwill to the controlling interest = $70 million - (70% x $20 million)
= $56 million Goodwill percent to the controlling interest = 75%
c. Goodwill to the non-controlling interest = $75 million - $56 million
= $19 million Goodwill percent to the non-controlling interest = 25%
Answer:
d
Explanation:
Unfortunately cutting or reducing production, or reengineering at all.
Answer: D. No insurance protection is offered on customer municipal accounts maintained at bank broker-dealers
Explanation:
Broker-Dealer are required to register their customers for insurance under the Securities Investor Protection Corporation (SIPC).
Broker-Dealers who however handle only tax-exempt securities such as municipal bonds are not required to be registered under the SIPC.
As this bank handles only municipal securities, they is not required to be registered under the SIPC which means that no insurance protection is offered on customer municipal accounts maintained by them.
Answer:
D
Explanation:
Delivery costs are mixed and utilities are variable.
Variable costs are cost that changes in direct proportion to the level of production. This means that when the variable cost increases then more units are produced and decreases when less units are produced.
Mixed costs also known as semi-variable costs have properties of both fixed and variable costs due to the presence of both variable and fixed components in them.
In this case utilities is a variable cost, it increases as the units increase, while delivery cost is a mixed cost, it has the element of both fixed and variable.
A fixed cost does not change with the level of activity it remains the same.
