Answer:
total sales $820 million
net income $425 million
total assets $750 million
total liabilities $735
1.2 million outstanding common stocks
an offer was made to buy their assets at $742.5 million
<u>company's book value per share:</u>
= (total assets - total liabilities) / total number of outstanding common stocks
= ($750,000,000 - $735,000,000) / 1,200,000 = $12.50 per stock
<u>company's liquidation value per share:</u>
= (total offer - total liabilities) / total number of outstanding common stocks
= ($742,500,000 - $735,000,000) / 1,200,000 = $6.25 per stock
Answer:
The Erie Canal
Explanation:
When it opened it dramatically decreased the cost of shipping while reducing the time to travel to the West.
Answer:
The debit to the retained earning should be $750,000 for this transaction because that is the market value of the asset to be distributed as dividend.
Explanation:
Property dividend is a form of dividend payout that involves distribution of company`s assets to equity holders as a form of return. These assets can be inventory, marketable securities or investment in a subsidiary.
For this distribution to be formal, it must be approved by the board of directors of the company. After approved and declared, the accounting entries can now be passed.
The accounting entries needed are:
Debit: Retained Earnings with the amount of the asset distributed.
Credit: Dividend Payable with the amount of the asset distributed.
It is important to note that the market value of asset to be distributed should be considered i.e the market value of the asset must be recognized in the book. The difference in book value and market value of the investment will be recognized in respective asset ledger account prior transfer to retained earnings.So that the market value of the investment is recognized on the debit side of retained earnings
In the case of Fitzgerald, $750,000 will be debited to retained earnings since it is the market value of the asset to be distributed.
Answer:
The estimate value of the subject property is $8,269,200
The other information that would be desirable in reaching a conclusion:
The closeness of the property to central business districts as the closer it is the higher the asking price.
The estimate was solely based on revenue, the applicable costs have been ignored.
The average taken might not be a good indication for the subject property because the property might have unique features
Explanation:
The formula for Gross Rent Multiplier is given Property Price / Gross Monthly Rental Income.
In determining the estimate value of the subject property ,we calculate the gross rent multiplier of the new property,then multiply it with the annual rental income.
In ascertaining the GRM of the new property we take the average GRM of the two similar properties in the same area.This is because the new property judging from number of units, lies in-between the other two properties.
GRM for Oaks
GRM=$9000000/($550*140)
GRM =116.88
GRM for Palms
GRM=$6,600,000/($650*90)
GRM =112.82
The average GRM=(116.88+112.82)/2
=114.85
Subject property price=114.85*(120*$600)
=$8,269,200
These firms do not have perfect market information to know all the price charges by different sellers,the quality the market demand and supply is etc.
