Answer:
The income statement, statement of stockholders' equity, and balance sheet for Longhorn Corporation is given below.
<u><em>The income statement</em></u>
Sales Revenue $ 67,700
COGS ($ 53,400)
Delivery expenses ($ 2,600)
Salary expenses ($ 5,500)
Net profit $ 6,200
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<u><em>Balance Sheet</em></u>
Asset
Cash $ 1,200
Equipment $ 29,000
Building $ 40,000
Supplies $ 3,400
Total Assets $ 73,600
Equity
Common Stock $ 44,000
Retain earning $ 24,400
(18,200 + 6,200)
Liability
Account Payable $ 4,400
Salaries payable $ 8,00
Total Liabilities $ 73,600
<u><em>Statement of Stockholders</em></u>
Opening common Stock $ 40,000
Addition $ 4,000
Closing common Stock $ 44,000
Retain earning Opening $ 18,200
Net profit $ 6,200
Retain profit Closing $ 24,400
Total Equity $ 68,400
Answer:
Toyosan's air bag was defective because it did not meet the expectations of a reasonable consumer.
Explanation:
Since the airbag was not as effective as it was expected by the customers, a suit against the car manufacturers from product liability may see the court conclude that the air bag was defective since it did not meet the expectations of a reasonable consumer which would have been protecting her head from hitting the steering wheel which still occured even tho the air bag was deployed.
Answer:
Explanation:
From the information povided:
(a) To compute the amount of goodwill paid by Chicago Corporation
Particulars Amount ($)
Accounts Receivable 100000
Inventory 170000
Plant & Equipment 400000
Land 90000
Customer List 4000
Trade Names <u> 16000</u>
NET ASSETS (A) <u>780000</u>
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Current liabilities 76000
Non-current liabilities <u>160000 </u>
NET LIABILITIES (B) <u> 236000</u>
∴
PURCHASE CONSIDERATION (A -B) 544000
<u>Less:</u> Cash Paid <u> 580000</u>
GODWILL <u> 36000 </u>
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b)
In the books of Chicago Corporation, the Journal Entry to record the purchase of Naperville Company.
Account Name Dr. Cr.
Accounts Receivable A/C 100000
Inventory A/C 170000
Plant Equipment A/C 400000
Land A/C 90000
Customer List A/C 4000
Trade Names A/C 16000
Goodwill A/C 36000
Current liabilities A/C 76000
Non-Current Liabilities A/C 160000
Cash A/C 580000
c)
The minimum required amount of goodwill that Chicago can amortize by the end of 2020 is $3600.This is because the amortization can take place for a period of 10 years.
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