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Vesna [10]
3 years ago
9

has acquired several other companies. Assume that Patton purchased Kate for $ 6 comma 000 comma 000 cash. The book value of Kate

's assets is $ 15 comma 000 comma 000 ​(market value, $ 17 comma 000 comma 000 ​), and it has liabilities of $ 13 comma 000 comma 000 ​(market value, $ 13 comma 000 comma 000 ​). Requirements 1. Compute the cost of goodwill purchased by Patton . 2. Record the purchase of Kate by Patton .
Business
1 answer:
svlad2 [7]3 years ago
5 0

Answer and Explanation:

1. The amount of goodwill is shown below:

= Purchase price - the market value of net assets

= $6,000,000 - ($17,000,000 + $13,000,000)

= $2,000,000

2. Now the journal entry for purchase is

Assets $17,000,000

Goodwill $2,000,000

      To Liabilities $13,000,000

      To Cash $6,000,000

(Being the purchase is recorded)

For recording this we debited the assets and goodwill as it increased the assets and credited the liabilities and cash as it also increased the liabilities and decreased the assets

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Answer:

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4 0
2 years ago
Read 2 more answers
An entrepreneur purchased an existing bicycle shop that had between $120,000 and $150,000 worth of sales annually for the past t
stepan [7]

Answer:

Forecasted sales: 25% maximum reduction.

Recommendations: try new ways to increase sales during the months left, or reduce its own cost.

Explanation:

  • If sales usually increase between March 1 and June 30, and this period accounts for 50% of annual revenue, if revenue is proportional to sales, a reduction in sales will reduce revenues.
  • Between March 1 and June 30 there are 4 months.
  • If sales usually pick up in March and this year they were low until the beggining of May, it means that  only 2 of the 4 most productive months were higly productive.
  • If 50% of sales are concentrated in this 4 months, and this year 2 of the 4 months were not really productive, a maximum 25% of sales (and hence of revenues) may have lost.
  • Therefore, revenues may lower by 25% this year.
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6 0
2 years ago
Bravo Industries intends to retire $950,000 in short-term debt using proceeds from the sale of 30,000 shares of common stock. Th
harina [27]

Answer:

the amount that should be excluded from the current liabilities is $750,000

Explanation:

The computation of the amount that should be excluded from the current liabilities is shown below;

= Number of shares in the common stock × selling price per share

= 30,000 shares × $25

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Hence, the amount that should be excluded from the current liabilities is $750,000

7 0
3 years ago
According to virginia satir, the single factor determining the kinds of relationships we make with others is
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3 years ago
Kenny is concerned that the amount of spam he is receiving is making him less productive at work. He knows that the
Vsevolod [243]

Answer:

<em>Sorry, I could not type the answer here directly because it doesn't allow me.</em>

It should be "spam" followed by "at"<em> (the symbol sign) </em>and "uce" plus "." and "gov"

There should be no spaces.

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A "spam" refers to<em> an email that you do not want in your inbox</em>. They are mostly intended for commercial purposes–including some emails that are deceptive. There are actually many ways to reduce the amount of spam reaching your email. For example, you could use an <em>email filter </em>or choose a <em>unique email address. </em>

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