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In-s [12.5K]
3 years ago
8

In 2020, Dooling Corporation acquired Oxford Inc. for $250 million, of which $50 million was attributed to goodwill. At the end

of 2021, Dooling's accountants derive the following information for a required goodwill impairment test:
Book value of Oxford (including goodwill): $234.5 million
Fair value of Oxford's tangible and intangible assets (excluding goodwill): $209.5 million
Fair value of Oxford (the reporting unit): $260.0 million

Required:
a. Determine the amount, if any, of the goodwill impairment loss that Dooling must recognize on these assets.
b. Determine the proper balance of goodwill in Dooling’s records at the end of 2021
Business
1 answer:
8_murik_8 [283]3 years ago
7 0

Answer:

$9.5m

Explanation:

Requirement 1

As the IAS 36 ( Impairment of assets) Impairment loss needs to be recorded when the recoverable amount of an asset is lower than its carrying value.

Book value of goodwill = $50million

Recoverable amount/Fair value = Fair value of Oxford the reporting unit  - Fair value of Oxford tangible and intangible assets excluding goodwill

Recoverable amount/Fair value = $250m - 209.5m

Recoverable amount/Fair value  = $40.5m

Impairment loss = Recoverable amount/Fair value - Book value

Impairment loss = $40.5m - $50m

Impairment loss = $9.5m

Requirement 2

In 2021, Goodwill will be recorded as $40.5m with an impairment loss of $9.5m

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The perception that people have of a company is called __________. A. Customer profiling B. Market awareness C. Public relations
Arisa [49]

Answer: Option D

Explanation: In simple words, corporate identity refers to the way in which a business corporation shows themselves to their stakeholders such as customers, investors etc. Many tools such as branding and advertising is used to develop a face for the company in the form of a perception or idea.

This perception and idea settles the image of the company in the eyes of the customer.

Hence from the above we can conclude that the correct option is D.

7 0
3 years ago
Lucia is using cost-volume-profit analysis to predict profits for a new product line. Which of the following reflect how Lucia’s
tino4ka555 [31]

Lucia’s analysis is subject to assumptions because(c) The analysis lacks validity if the total fixed costs required for the calculated break-even point generates too low of capacity.

Explanation:

Cost-volume-profit analysis is used to make short-term decisions.

Cost-volume-profit (CVP) analysis is used to study the changes in cost and volume and how its impact on the company's operating income and net income.

While  performing <u>Cost-volume-profit (CVP) analysis</u>  several assumptions are made like assuming the  Sales price per unit to be  constant. Variable costs per unit  to be constant.

The five basic component of CVP analysis includes

  • volume or level of activity
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5 0
3 years ago
Suppose the price of a pound of flax seed in west virginia is currently $1.00. the law of one price suggests that because the pr
Reptile [31]

Answer:

It will be between $1.00 and $ 1,20

Explanation:

Solution

Given:

From the given question, the price of a flax seed in west Virginia is presently at $1.00

From the law of one price states that since the price of a pound of flax seed is $1.20 in Kentucky,

Then,

The price of a flax seed pound will be between 1.20 and 1.00

Therefore, the price of the flax seed in Kentucky as compared to that of west Virginia will be placed in between  prices of $1.20 and $1.00 after the supply by sellers in both market has been adjusted or raised.

6 0
4 years ago
Demand deposits are included in?
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Answer:

savings accounts or checking accounts

8 0
2 years ago
The Stationery Company purchased merchandise on account from a supplier for $9,100, terms 2/10, n/30. The Stationery Company ret
yaroslaw [1]

Answer:

$7,840

Explanation:

The terms 2/10, n/30 means that if the amount is paid in maximum 10 days, the client will receive a 2% discount. If he/she doesn't make the payment in this period, the total amount has to be paid within 30 days.

As Stationary Company returned merchandise with an invoice amount of $1,100, you have to subtract this amount from the initial value of the merchandise they purchased:

$9,100-$1,100= $8,000

Then, you have to calculate the 2% discount they will get from the $8,000 for paying the invoice within the discount period:

$8,000*2%= $160

$8,000-$160= $7,840

According to this, the answer is that the amount of cash required for the payment is $7,840.

7 0
4 years ago
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