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IrinaK [193]
3 years ago
11

What is the term called when a company pays for a set of assets that is worth more than their company’s worth if they liquidised

all their assets and paid back all their liabilities(Book Value)?
Is it called ‘impairment’?
Business
1 answer:
andriy [413]3 years ago
5 0

Offsetting Assets and Liabilities  is when a company pays for a set of assets that is worth more than their company’s worth if they liquidised all their assets and paid back all their liabilities(Book Value)

<u> Explanation: </u>

A firm who wants to restructure and to infuse further finance into the business they will go for the above said option stated in the question. The   term offsetting of assets and liabilities is being used to refer for the above mentioned transaction in the question.

According to the accounting principle the company will sell of his assets which is more than the company’s worth will pay off their liability simultaneously and then they proceed for the restructuring of finance. This way it will help them to minimise their debt and the firm can declare it a debt free company.

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The Canton Corporation shows the following income statement. The firm uses FIFO inventory accounting. CANTON CORPORATION Income
Zepler [3.9K]

Answer:

Aftertax income     47,278.7

Explanation:

Sales 14,600 units at $14.30 (10%Δ)       208,780

Cost of goods sold (unchanged)        <u>   (116,800)   </u>

      Gross profit                                         91,980

S&A expenses; 5% of sales

208,780 x 5% =                                          (10,439)

Depreciation  (unchanged)                    <u>   (14,000)  </u>

Operating profit                                           67,541  

Taxes (30% of operating profit)             <u>    20,262.3  </u>

Aftertax income                                          47,278.7‬

8 0
3 years ago
38) A lottery ticket states that you will receive $250 every year for the next ten years. a. What is the present value of the wi
Stells [14]

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

A lottery ticket states that you will receive $250 every year for the next ten years.

A)  i=0.06      ordinary annuity

PV= FV/(1+i)^n

FV= {A*[(1+i)^n-1]}/i

A= annual payment

FV= {250*[(1.06^10)-1]}/0.06= $3,295.20

PV= 3,295.20/1.06^10=1,840.02

B) i=0.06 annuity due (beginning of the year)

FV= 3,295.20 + [(250*1.06^10)-1]= $3492.91

PV= 3492.91/1.06^10= $1,950.42

C) The interest gets compounded for one more period in an annuity due.

5 0
3 years ago
Jim buys a 5 percent bond in the amount of $100. If the market interest rate increases to 10 percent Jim can sell his bond for u
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Answer:

$50

Explanation:

Jim buys a 5% bond

The amount is $100

The market interest rate increases to 10%

Therefore the price at which the bond cann be sold is calculated as follows

= 5×100

= 500×0.01

= 50

Hence it can be sold for $50

3 0
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Data monitoring refers to the business practice where key business data are constantly monitored against quality assurance rules to ensure that it's always of good quality and complies with previously defined design and accuracy requirements.

Monitoring the data helps a company to constructively maintain high, accurate data quality standard. Through periodically reviewing the data as it is processed inside programs, enterprises may eliminate commodity-intensive information pre-processing before transferring. Software quality is tested with software management at the moment of creation, rather than during a step.

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