Answer:
a. $4.4 million
Explanation:
a. For computing the cost of the goodwill, first we have to calculate the fair value of the net asset which is shown below:
The fair value of net asset = The market value of Red River Chips' assets - the market value of liabilities
= $7 million - $6.2 million
= $0.8 million
And, the purchase value of Red River Chips for cash is $5.2 million
So, the goodwill would be
= $5.2 million - $0.8 million
= $4.4 million
b. Goodwill is an intangible asset that is recorded in the asset side of the balance sheet. It is used for impairment tests annually. Since the fair value is less than the carrying value so the journal entry would be
Loss on impairment A/c Dr XXXXX
To Goodwill A/c XXXXX
(Being loss on impairment is recorded)
Answer:
According to the Washington post article, prices of healthcare cost, utilities and housing has increased faster than social security benefits.
According to it, social security grew 43% between 2005 and 2015. But, monthly housing cost rose by 44% while renting cost increased 56%. Further, price of heating oil increased 159% and price of electricity by 63%. Lastly, cost of landline phone service increased by 52%.
So the answer is electricity, heating oil, and rent.
Answer:
6 years
Explanation:
The payback period calculates how long it takes for the amount invested in a project to be recovered from the cumulative cash flow.
Payback period = amount invested/ cash flow
$468,000 / $78,000 = 6 years
I hope my answer helps you
Answer:
The total cost to produce a bottle of pill is $5
Explanation:
Break-even in unit is calculated by dividing the fixed costs by contribution per unit.
Here the breakeven is given in terms of bottles thus our unit is bottles.
Plugging in the values,
200000 = 1000000 / CM per unit
CM per unit = 1000000 / 200000
CM per unit = 5
Contribution per unit is calculated as the Selling price per unit - variable cost per unit.
If selling price per unit is $10, then variable cost per unit will be:
CM per unit = SP -VC
5 = 10 - VC
VC = 10 - 5
VC = 5 per unit
The total cost to produce a bottle of pill is $5 as the fixed cost will vary depending on the number of units produced thus the actual cost that every one unit of bottle requires is $5.