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puteri [66]
2 years ago
10

A company acquires another company for $3,000,000 in cash, $10,000,000 in stock, and the following contingent consideration: $1,

000,000 after year 1, $1,000,000 after year 2, and $500,000 after year 3, if earnings of the subsidiary exceed $10,000,000 in each of the three years. The fair value of the contingent -based consideration portion is $2,100,000. What is the total consideration transferred for this business combination?
Business
1 answer:
lisabon 2012 [21]2 years ago
6 0

Answer: the correct answer is $15,100,000

Explanation:

Business combinations must be accounted for using the acquisition method. According to this method, the consideration transferred is measured at its acquisition date fair value. Contingent consideration is an obligation of the acquirer to transfer additional assets or equity securities to the former owners of an acquiree as part of the exchange for control of the acquiree if specified future events occur or conditions are met. On the business combination date, contingent consideration must be recognized at its acquisition-date fair value of $2,100,000 and be included in the total fair value of the consideration transferred and in the calculation of goodwill.

Thus, the total acquisition date fair value of the consideration transferred is <u>$15,100,000</u> = $3,000,000 cash + $10,000,000 fair value of stock + $2,100,000 fair value contingent consideration..

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A corporation issues 2,000 shares of common stock for $32,000. The stock has a stated value of $12 per share. The journal entry
Triss [41]

Answer:

d.$24,000

Explanation:

Given that

Issuance of common stock = $32,000

Number of shares = 2,000 shares

Stated value per share = $12 per share

By considering the above information

The common stock would be credited for

= Number of shares × Stated value per share

= 2,000 shares × $12 per share

= $24,000

Hence, the correct option is d. $24,000

5 0
2 years ago
Three months of rent were prepaid on May 1 for $7,200, but two months have now expired, leaving only one month prepaid at June 3
Dafna11 [192]

Answer:

b- $2,400

Explanation:

The computation of the amount that should be recorded is given below:

= 3 months rent ÷ number of months

= $7,200 ÷ 3 months

= $2,400

Hence, the amount of rent that should be recorded is $2,400

Therefore the option b is correct

The same should be considered

7 0
2 years ago
It is well-known that retaining an existing customer is far less expensive than acquiring a new one, so you suggest that the own
leva [86]

Answer:

internal and external data

Explanation:

Big Data analysis can be regarded as one that contains massive amounts of data as well as complex analysis.

Internal data can be regarded as information that is been generated from within the business these could contains some areas like operations as well as maintenanc and personnel.

External data on other hands are attributed to the market, as well as from customers and from the firms competitors, it could be gotten from survey. All for increasing profitability.

4 0
2 years ago
How does a Fire Prevention Plan benefit your workplace? Select the 2 answer options that apply. It’s less likely that a fire wil
lbvjy [14]

Answer:

It is less likely that  injuries will occur during an emergency  

Its less likely that damage will occur during an emergency  

are the correct options.

Explanation:

A fire prevention program eliminates or reduces the occurrence of fires by training people in fire safety.

The fire prevention plan should include: The list of all <em>major fire hazards, proper storage procedures  and handling procedures for hazardous materials, the various types of fire protection equipment required to control major hazard, potential ignition sources and their control</em><em><u>. </u></em>

A fire needs fuel, heat and oxygen, without oxygen, fuel and heat a fire cannot start. So the strategy to prevent fire should try to remove one of more of these elements.

5 0
2 years ago
Read 2 more answers
Darnell lives in Philadelphia and runs a business that sells pianos. In an average year, he receives $842,000 from selling piano
Karolina [17]

Answer:

The wholesale cost for the pianos that Darnell pays the manufacturer - explicit cost  

The salary Darnell could earn if he worked as an accountant - implicit cost

The wages and utility bills that Darnell pays - explicit cost  

The rental income Darnell could receive if he chose to rent out his showroom.-implicit cost

Explanation:

Explicit cost includes the amount expended in running the business.

They include rent , salary and cost of raw materials

Explicit cost is used in determining accounting profit

Implicit cost or opportunity cost is the cost of the next best option forgone when one alternative is chosen over other alternatives

Implicit cost is used in determining economic profit

If Darnell didn't use his showroom, he could have rented it out. Renting it out is his next best option that was forgone. Thus, it is an implicit cost

If Darnell didn't start his business, he could have been working as an accountant. The amount he could have earned as an accountant is his implicit cost

7 0
2 years ago
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