Answer:
The seller transfers title to the buyer once the merchandise is shipped
Explanation:
Free onboard shipping point refers to a practice where the buyer of a product takes responsibility of the good once it is shipped by the seller.
So when the supplier ships a product he can record a sale because the ownership of the good has been shifted to the seller abd he will be paid for services rendered.
The buyer will record an increase in his inventory at this point and make provision for risk of shipping along with shipping cost.
Answer:
WACC= 17.95%
Explanation:
Weighted average cost of capital is the average cost of all of the long-term types of finance used by a company weighted according to the that amount of finance used in relation to the total pool of fund.
It is calculated using the formula below:
WACC = (We×Ke) + (Wd×Kd)
Ke-cost of equity- 22%
We- equity weight- 100% - 45% = 55%
Kd-After tax cost of debt-10.3%
Wd- 45%
After tax cost of debt = Before tax ×× (1- tax rate)
After tax cost of debt = 13%× (1-0.21) = 10.3%
Cost of equity = 22%
WACC =(0.55× 22%) + (0.45× 13%)=17.95%
WACC= 17.95%
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.
I’m not sure about the first one (my best guess is B.) but the second one is A.
Answer:
$42.60
Explanation:
Current value = Future dividends and value*Present value of discounting factor(rate%,time period)
Current value = $1.85 / (1+10%) + $45 / (1+10%)
Current value = $1.85/1.1 + 45/1.1
Current value = $
1.68181 + $40.91
Current value = $42.5918
Current value = $42.60
