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iris [78.8K]
3 years ago
15

The balance sheet of Cattleman's Steakhouse shows assets of $86,800 and liabilities of $14,800. The fair value of the assets is

$89,600 and the fair value of its liabilities is $14,800. Longhorn paid Cattleman's $84,020 to acquire all of its assets and liabilities. Longhorn should record goodwill on this purchase of:
Business
1 answer:
xxMikexx [17]3 years ago
6 0

Answer:

The goodwill is $9,220

Explanation:

Goodwill is the excess of purchase consideration paid to acquire a business over the fair value of net assets acquired.

Fair value of net assets acquired is the difference between the fair of assets acquired over the fair value of liabilities taken up which is shown below.

Net assets=$89,600-$14,800

Net assets =$74,800

Since purchase consideration paid is $84020

Goodwill=$84,020-$74800

Goodwill=$9,220

The goodwill of $9220  represents the premium paid over the net assets of Catteman's Steakhouse as a compensation to the owners of the business in return for their efforts of running the business and see go through different phases of development since the establishment of the business.

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3 years ago
In my opinion, I think that each and every child should get an education at school. (rewrite and reduce to 9 words)
Mashutka [201]

In my opinion, every single child needs an education.

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2 years ago
Alamanzo Devices, Inc., in Oklahoma City is opening a location in Brazil. Managers from Oklahoma City will staff key positions i
alekssr [168]

Answer:

ethnocentric

Explanation:

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5 0
3 years ago
Read 2 more answers
Pacific Packaging's ROE last year was only 3%; but its management has developed a new operating plan that calls for a debt-to-ca
Natalka [10]

Answer: 12.53%

Explanation:

EBIT = $780,000

Interest = $470,000

EBT = EBIT - Interest

= $780,000 - $470,000

= $310,000

Net Income = EBT - Tax

= $310,000 - (35% × $310,000)

= $310,000 - (0.35 × $310,000)

= $310,000 - $108,500

= $201,500

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= 3,571,429

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Debt/Total asset = 0.55

Debt/3,571,429 = 0.55

Debt = 0.55 × 3571429

= 1,964,286.4

Equity = 0.45 × 3571429

= $1607143.5

Return on equity = Net income/Equity

= $201,500/$1,607,143.5

= 0.1253

= 12.53%

The company's return on equity will be 12.53%.

6 0
3 years ago
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3 years ago
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