Answer:
$1,002,000
Explanation:
The costs incurred on the share for share exchange include the fair value per share ,issue costs,direct cost as well as contingent consideration(consideration based on the acquired business performance.
However,the costs eligible to be recorded as investment upon acquisition are the fair value per share and the contingent obligation as shown below:
Fair value (entire shares) $50*20,000=$1,000,000
fair value of potential obligation =$2000
total value of investment $1,002,000
The issue costs and direct should be expensed immediately.
Answer:
The book value of shares is $10
Explanation:
The balance of shareholders equity is $2,200,000.This comprises of retained earnings of $800,000 and Issued Share Capital of $1,400,000(for 140,000 units of shares)
To ascertain the unit of shares,see below:
45000units= $450,000
15000units reacquired at $150,000
Which also means that $1,100,000 is for 110,000units of shares.
In each of these cases highlighted above share price is $10
for instance:$450,000/45000shares=$10
$150,000/15000=$10 e.t.c
I'm on the same question right now. I wanna say C, <em>Black & Decker sells its power tools directly to consumers on the Internet.</em>
The question asks about business buyer behavior which is pretty much businesses buying and selling to eachother. Lowe's is involved with Whirlpool brand items, Kroger is involved with purchasing items from other businesses/suppliers, and Kellogg is selling their product to other grocery stores (businesses).
Black & Decker isn't involved with any other businesses.
Anyways, I'd say C :)
EDIT: it is C, 100%. Just finished
Answer:
Please kindly go through explanation for the answers.
Explanation:
A)The required return if Beta is 2 = 0.06+0.08*2 =0.22
B)Here Rf = 0.06
Expected return of the portfolio = 0.4*22% + 0.6*6% =12.4%
since beta of Rf = 0,the expected beta = 0.4*2 = 0.8
C)Beta is nothing but systematic risk of a security in comparing to the market. In this case stock z having beta of 1.5 which is less than beta of stockX i.e 2. and expected return is 15%.so stockz is offering lower return at lower risk. If the investor is a risk averse its a good buy.
D) let W be portion of stock X.
Then w*2 + (1-w)*0 = 1.5
W = 1.5/2 =0.75
to construct a portfolio which has a beta of 1.5 we have to invest 75% of our money in stock X and remaining in risk free asset
E) expected return = 0.22*.75 +0.25*0.06 = 16.5% + 1.5% = 18%
The journal entry to record the purchase the shares is that investment account will be debited with $200000 and bank account credited with $200000.
Given that on March 1, 2016, Rain Technology purchased 20,000 shares of Lightyear Services Company for $ 10 per share.
We are required to pass a journal entry for the recording of the purchase of the shares.
Journal is the book in which the transaction is recorded first time in the company. It helps in the formation of ledger as well as other books also.
The journal entry will be as under:
1) Investment A/c Dr. $200000
To Bank A/c $200000
(Purchase of shares by Rain Technology)
Hence the journal entry to record the purchase the shares is that investment account will be debited with $200000 and bank account credited with $200000.
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