In determining the fair value of the asset or liability the exit price should be used. A fair price means the price that the asset or liability would get when sold in the market. So, the pair price will be determined by calculating the market price of such goods or liabilities or at what rate these goods or liabilities will be sold in the market.
The entry price would not be the correct price as the asset or liability may have been bought by the company many years ago. So based on this, the price of these assets would have increased as in the case. Sometimes the prices of these assets would have also decreased. The same reason is applicable to liabilities also.
This is known as the appreciation and depreciation of assets and liabilities. So to remove the effect of this the fair value will be based only on the exit price.
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The Accumulated depreciation account had a balance of $144000
<h3>What is
Accumulated depreciation?</h3>
Accumulated depreciation is the total amount of a company's asset depreciation, whereas depreciation expense is the amount depreciated for a single period. Depreciation is an accounting entry that represents the decrease in the cost of an asset over its useful life.
Accumulated depreciation is the total amount of depreciation that has been expensed against the asset's value. On the balance sheet, fixed assets are recorded as a debit, while accumulated depreciation is recorded as a credit, offsetting the asset.
Accumulated depreciation accounts are credit-balanced asset accounts (known as a contra asset account). It is classified as a contra asset account because it has a negative balance that is intended to offset the asset account with which it is paired, resulting in a negative balance.
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The Answer Is Option A, Action
Answer:
-1.8
Explanation:
Data provided in the question:
Mean = $32,500
Standard deviation = $2,500
Earning, X = $28,000
Now using the formula provided in the question for the calculation of the z - score, we have
z score = ( X - Mean ) ÷ ( Standard deviation )
on substituting the respective values, we get
z score = ( $28,000 - $32,500 ) ÷ ( $2,500 )
or
z score = -4500 ÷ $2,500
or
z - score = -1.8
Answer:
d.$87,920
Explanation:
Residual Income = Net Income - Cost of Investment
therefore
Residual Income = $166,000 - ($976,000 x 8%)
= $87,920
