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anygoal [31]
3 years ago
5

Large purchased all of Small's voting stock for $11 million when Small's total owners' equity was $4 million. The book value and

fair value of Small's liabilities equal $3 million. However, the fair value of Small's total assets equals $9 million. What amount of goodwill is recorded by Large (in millions)
Business
1 answer:
hoa [83]3 years ago
8 0

Answer:

The amount of goodwill that is recorded by Large is $5 million

Explanation:

Goodwill is the excess of price consideration paid to acquire controlling stake in a company over the fair value of the company's net assets.

Net assets in the sense implies the fair value of total assets less fair value of liabilities.

Fair value of total assets is $9 million

Fair value of liabilities    is $3 million

As a result net assets upon acquisition  is $6 million($9 million less $3 million)

Since the consideration paid in acquiring Small's voting stake is $11 million, goodwill is $5 million($11 million less $6 million).

The $ 5 million is the excess of purchase consideration over the fair value of Small's net assets as at the date of acquisition

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A the production possibilities frontier (PPF) is bowed outward as a result of:_________
vodomira [7]

Answer: 2) increasing opportunity costs.

Explanation:

The Production Possibilities frontier is bowed out as it shows that for one more unit of a good to be produced, an additional unit of the other good must be given up.

This represents increasing opportunity costs because opportunity cost is the cost we incur for choosing one alternative over another. By producing more and more of one good, we give up more and more of the other good which means that our opportunity cost rises.

8 0
3 years ago
ABC Company owns 30% of the outstanding shares of Teal Company. At the beginning of the current year, the carrying value of Teal
BabaBlast [244]

Answer:

$69,000

Explanation:

Percentage of shares owned by ABC in Teal's company = 30%

This is an example of equity method investment , and a portion of the attributable income at the end of the year is earned and added to the initial stock.

Attributable income is the remaining income after dividends have been settled.

<u>Workings</u>

The opening carrying value of the shares on ABC balance sheet = 60,000

Profit made at the end of the period = 40,000

Dividends paid = 10,000

Attributable income to share holders = 40000-10000 = 30,000

ABC portion of attributable profit = 30000*30% = 9,000

Carrying value at the end of the year = opening carrying value + portion of the attributable profit

=60000+9000=69000

6 0
3 years ago
Which of the following is true about investors who buy preferred stock?
raketka [301]
I think the correct answer is A. Investors who buy preferred stock receive dividends after the common stock shareholders. Preferred stock is a stock type that gives right to the owner a fixed share of the company's profit or fixed dividend.
7 0
3 years ago
Read 2 more answers
In "thinking like an economist," the section "the role of economic theory" states that many economists believe that useful insig
rusak2 [61]

In "thinking like an economist," the section "the role of economic theory" states that many economists believe that useful insights into our behavior can be gained by assuming that we act as if governed by the rules of rational decision-making.

It is possible to define rational decision-making as a decision-making process that incorporates reasoning at every stage. It is founded on the use of impartial knowledge. The first step in making a reasonable decision is to identify the issue that needs to be resolved, followed by the collection of all relevant data.

The next step is to examine every outcome that might result from each potential solution. The decision-making process that follows comprises weighing all viable options and selecting the best one based on reasoning.

Rational decision-making examples include:

● A student chooses what to study in his post-secondary education.

● A commercial choice regarding what to buy for the company.

To know more about decision-making refer to:

brainly.com/question/1249089

#SPJ4

7 0
1 year ago
Harvest master, a maker of farm equipment based in nebraska, is planning to send a u.s. marketing manager to lead a product laun
joja [24]

<span>The options attached to the question above are given below:</span>

<span>A. </span>The culture of the host country is likely to be much more individualistic than U.S. culture is.

 B. The manager will have greater difficulty finding educated workers in the host country than in the United States.

 C. The manager may not be familiar with the host country’s language.

D. The host country will likely tax a larger percentage of the manager’s income than the United States would.

E. The host country will likely have few protections for its workers.

ANSWER

The correct option is D.

A socialist system is a type of economic system in which the factors of production are jointly owned by all the citizens and production affair is regulated by the government. Such a country does not encourage individuals to operate personal business. Thus, such a country will lay high tax on the income of the manager in order to discourage him from selling his machine in their country.

8 0
3 years ago
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