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Talja [164]
3 years ago
11

The terms of a business combination can provide that former shareholders of the acquired firm may receive additional compensatio

n based on post-combination earnings or post-combination market share price. Would additional compensation based on such earnings or market price be considered an additional cost of the business combination?
Business
1 answer:
Art [367]3 years ago
5 0

Answer:

No, they wouldn't.

Explanation:

Any extra compensation to former stockholders of an acquired company which is based on post-combination share price or post-combination profits cannot be recognized as adjustments in the price of business combinations.

The reason for this is that changes in the fair value of contingent consideration (in case something happens) after the company has been acquired, e.g. achieving certain profits or stock price, are not considered period adjustments, therefore they cannot be included in the cost of the business combination (acquisition).

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Consider the following marginal cost function. a. Find the additional cost incurred in dollars when production is increased from
weqwewe [10]

Answer:   (a) $197,500

(b) $ 189,500

Explanation:

Given : The marginal cost function : C′​(x)=4000−0.4x

To find the cost function, we need to integrate the above function with respect to x.

Now, the additional cost incurred in dollars when production is increased from 100 units to 150 units will be:-

\int^{150}_{100}\ C'(x)\ dx\\\\=\int^{150}_{100} (4000-0.4x)\ dx\\\\=[4000x-\dfrac{0.4x^2}{2}]^{150}_{100}\\\\=[4000(150)-\dfrac{0.4(150)^2}{2}-4000(100)+\dfrac{0.4(100)^2}{2}]\\\\=[600000-4500-400000+2000]\\\\=197500

Hence, the additional cost incurred in dollars when production is increased from 100 units to 150 units= $197,500

Similarly,  the additional cost incurred in dollars when production is increased from 500 units to 550 units :-

\int^{550}_{500}\ C'(x)\ dx\\\\=\int^{550}_{500} (4000-0.4x)\ dx\\\\=[4000x-\dfrac{0.4x^2}{2}]^{550}_{500}\\\\=[4000(550)-\dfrac{0.4(550)^2}{2}-4000(500)+\dfrac{0.4(500)^2}{2}]\\\\=[2200000-60500-2000000+50000]\\\\=189,500

Hence, the additional cost incurred in dollars when production is increased from 500 units to 550 units = $ 189,500

4 0
2 years ago
Which accurately explains how profit is calculated? A. Benefits and costs are balanced. B. Total retail sales are determined. C.
andre [41]

Answer:

Costs are subtracted from revenues.

Explanation:

As we know  

Profit is calculated when the cost is subtracted from revenues.  

In mathematically,  

The profit = Revenues - cost  

The profit which would be calculated above is shown in the debit side of the income statement.  

As the income statement records all the expenses or cost incurred and all the revenues which are generated

6 0
2 years ago
The following information is available for Splish Brothers Corp. for the year ended December 31, 2022. Other revenues and gains
Readme [11.4K]

Answer:

Net Income    <u>  195,300</u>

Explanation:

The question is to prepare a  multi-step income statement

Splish Brothres Corp

Income Statement for the year ended December 31, 2022

Particulars/Description                               Amount ($)                    Amount ($)

Sales Calculation                                      

Sales Revenue                                                                                   747,000

Subtract:

Sales Returns                                               9,000

Sales discounts                                            3,200                            (12,200)

Net Sales                                                                                             734,800

Cost of Goods sold                                                                             (283,000)

Gross Profit                                                                                          451,800

Operating Expenses                                                                           (210,000)

Operational Income                                                                             241,800

Other gains and revenue                         21,800

Other Expenses and losses                      (3,200)                                 18,600

Income before Income Taxes                                                              260,400

Income tax expense (25% x 260,400)                                              <u>   (65,100)</u>

Net Income                                                                                        <u>   195,300</u>

4 0
3 years ago
Why do older kids think they know every thing?
fomenos

Answer:

I have no clue tbh lol they think they are the boss of us

8 0
2 years ago
Read 2 more answers
Juice Drinks has beginning inventory of $10,000, purchases in the amount of $150,000, and ending inventory of $8,000. Juice Drin
astra-53 [7]

Answer:

$152,000

Explanation:

Given the data as shown below;

Opening inventory = $10,000

Purchases = $150,000

Ending inventory = $8,000

Therefore,

Juice drinks cost of goods sold = Opening inventory + Purchases - Ending inventory

= $10,000 + $150,000 - $8,000

= $152,000

8 0
3 years ago
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