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Dennis_Churaev [7]
3 years ago
11

Northern purchased the entire business of Southern including all its assets and liabilities for $2,400,000 on December 31, 2021.

Below is information related to the two companies at that date: Northern Southern Fair value of assets $ 4,200,000 $ 3,200,000 Fair value of liabilities 2,100,000 1,200,000 Reported assets 3,200,000 2,600,000 Reported liabilities 2,000,000 1,000,000 Net Income for the year 240,000 200,000 How much goodwill did Northern pay for acquiring Southern?
Business
1 answer:
stich3 [128]3 years ago
5 0

Answer:

$400,000

Explanation:

The computation of goodwill is shown below:-

Fair value of assets = $3,200,000

Fair value of liabilities = $1,200,000

Cash paid for southern = $2,400,000

Acquired Net assets = $2,000,000

Net assets acquired = Fair value of assets - Fair value of liabilities

= $3,200,000 - $1,200,000

= $2,000,000

Goodwill acquired = Cash paid for southern - Acquired Net assets

= $2,400,000 - $2,000,000

= $400,000

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Armstrong Valley Bicycles uses a standard part in the manufacture of several of its bikes. The cost of producing 40,000 parts is
scoundrel [369]

Answer:

It is cheaper to make the part.

Explanation:

Giving the following information:

The cost of producing 40,000 parts is $138,000, which includes fixed costs of $68,000 and variable costs of $70,000. The company can buy the part from an outside supplier for $3.50 per unit and avoid 30% of the fixed costs.

<u>The cost of making the part is $138,000. That will be the cost in the income statement. </u>

We can calculate the effect on income if they buy the part.

Buy:

Selling pirce= 3.5

Savings in fixed costs= (0.3*70,000)= 21,000

Total cost= 3.5*40,000 + 70,000 - 21,000= $189,000

It is cheaper to make the part.

7 0
3 years ago
Tầm ảnh hưởng của các yếu tố đến hiệu quả công việc
dusya [7]
I don’t know bro try English?
8 0
3 years ago
:- How might U.S. pharmaceutical companies and U.S. consumers benefit from the rise of the Indian pharmaceutical industry?
lesantik [10]

Answer:

Due to the rise of the India's pharmaceutical industry the US pharmaceutical companies benefit by the increase in volume of sales due to the low costs of imports.

The U.S. consumers benefited from rise in Indian pharmaceutical industries, because of lower cost medications, insurance, copays as well as out of pocket expenses and greater financial flexibility that offers pharmaceuticals developed at lower research and development (R&D) cost.

Explanation:

Due to the rise of the India's pharmaceutical industry the US pharmaceutical companies benefit by the increase in volume of sales due to the low costs of imports.

The U.S. consumers benefited from rise in Indian pharmaceutical industries, because of lower cost medications, insurance, copays as well as out of pocket expenses and greater financial flexibility that offers pharmaceuticals developed at lower research and development (R&D) cost.

The U.S. pharmaceutical companies have major benefits from India because the people from India see others inputs instead of the goals for themselves and America is seen as an individualistic culture and there is lower power distance in America due to the fact that everyone is created equal which is why within America, people often to seek their own personal goals instead of the good of others.

Furthermore America is more concerned about self while India seeks to help the world globally which is why two different counties have to adapt to policies and procedures to respect exporting trade rights and this policy is known as the World Trade Organization.

6 0
3 years ago
Vanishing Games Corporation (VGC) operates a massively multiplayer online game, charging players a monthly subscription of $10.
Crank

Answer:

Vanishing Games Corporation (VGC)

1. Analysis of the effect of transactions on the accounting equation:

Assets  = Liabilities + Equity

Assets (Cash) increases +$52,500 and Assets (Accounts Receivable) decreases -$52,500 = Liabilities + Equity.

b. Assets (Cash) increases +$235,000 = Liabilities + Equity (Retained Earnings) increase + $235,000.

c. Assets (Equipment) increases +41,900; Cash decreases -$12,000 = Liabilities (Notes Payable) increase +$29,900 + Equity.

d. Assets (Cash) decreases -$15,600 = Liabilities + Equity (Retained Earnings) decrease - $15,600.

e. Assets (Cash) increases + $50,500 and (Accounts Receivable) increases + $50,500 = Liabilities + Equity (Retained Earnings) increase + $101,000.

f. Assets = Liabilities (Accounts Payable) increase +$5,900 + Equity (Retained Earnings) decrease -$5,900.

g. Assets (Cash) decreases - $310,000 = Liabilities + Equity (Retained Earnings) decreases - $310,000.

h. Assets (Supplies) increase + $5,100 = Liabilities (Accounts Payable) increase +$5,100 + Equity.

i. Assets (Cash) decreases - $5,100 = Liabilities (Accounts Payable) decrease - $5,100 + Equity.

2. Journal Entries:

a. Debit Cash Account $52,500

Credit Accounts Receivable $52,500

To record cash from customers.

b. Debit Cash Account $235,000

Credit Service Revenue $235,000

To record cash for service revenue.

c. Debit Equipment $41,900

Credit Cash Account $12,000

Credit Notes Payable $29,900

To record purchase of 10 new computer services

d. Debit Advertising Expense $15,600

Credit Cash Account $15,600

To record payment for advertising.

e. Debit Cash Account $50,500

Debit Accounts Receivable $50,500

Credit Service Revenue $101,000

To record subscriptions for services sold.

f. Debit Utilities Expense $5,900

Credit Utilities Payable $5,900

To record utilities expense.

g. Debit Wages & Salaries Expense $310,000

Credit Cash Account $310,000

To record wages paid.

h. Debit Supplies Account $5,100

Credit Accounts Payable $5,100

To record purchase of supplies on account.

i. Debit Accounts Payable $5,100

Credit Cash Account $5,100

To record payment on account.

3. T-Accounts:

                                             Cash Account

Beginning Balance       $2,360,000      c. Equipment                   12,000

a. Accounts Receivable       52,250      d. Advertising Expense 15,600

b. Electronic Arts, Inc.        235,000     g. Wages & Salaries     310,000

e. Service Revenue             50,500      i. Accounts Payable          5,100

                                       <u>                  </u>      Balance c/d             <u> 2,355,050</u>

                                        <u>2,697,750</u>                                        <u>2,697,750</u>

Balance b/d                     2,355,050

                                     Accounts Receivable

Beginning Balance        152,000           a. Cash                          52,250

e. Service Revenue        <u>50,500</u>           Balance c/d                 <u>150,250</u>

                                      <u>202,500</u>                                              <u>202,500</u>

Balance b/d                    150,250

                                        Supplies

Beginning Balance        19,100          Balance c/d                       24,200

Accounts Payable          <u> 5,100</u>                                                   <u>            </u>

                                     <u>24,200</u>                                                   <u>24,200</u>

Balance b/d                  24,200

                                       Equipment

Beginning Balance       948,000       Balance c/d                       989,900

c. Cash                            12,000

c. Notes Payable            <u>29,900</u>                                                <u>              </u>

                                     <u>989,900</u>                                                <u>989,900</u>

Balance b/d                  989,900

   

                                         Land

Beginning Balance    1,920,000

                                      Building

Beginning Balance     506,000

                                         Accounts Payable

i. Cash                               5,100         Beginning Balance           109,000

  Balance c/d                <u>109,000</u>         h. Supplies                            <u> 5,100</u>

                                     <u>114,100</u>                                                        <u>114,100</u>

                                                            Balance b/d                      109,000

                                       Unearned Revenue

                                                             Beginning Balance         152,000

                                         Advertising Expense

d. Cash                               15,600

                                         Utilities Expense

f. Utilities Payable                5,900

                                        Utilities Payable

                                                               f. Utilities Expense            5,900

                                        Wages & Salaries Expense

g. Cash                             310,000

                                         Service Revenue

                                                               b. Cash                             235,000

Balance c/d                       336,000         e. Cash                             50,500

                                        <u>               </u>        e. Accounts Receivable   <u> 50,500</u>

                                         <u>336,000</u>                                                 <u>336,000</u>

                                                               Balance b/d                      336,000

                                          Notes Payable (due 2018)

     Balance c/d           109,900           Beginning Balance            80,000

                                    <u>             </u>            c. Equipment                     <u>29,900</u>

                                   <u>109,900</u>                                                      <u>109,900</u>

                                                             Balance b/d                       101,000

                                           Common Stock

                                                              Beginning Balance     2,200,000

                                           Retained Earnings

                                                              Beginning Balance     3,364,100

4. Trial Balance as at January 31:

                                              Debit                  Credit

Cash                                  $2,355,050

Accounts Receivable              150,250

Supplies                                    24,200

Equipment                              989,900

Land                                     1,920,000

Building                                  506,000

Advertising expense                15,600

Utilities Expense                        5,900

Utilities Payable                                                 $5,900

Wages & Salaries                  310,000

Service Revenue                                             336,000

Notes Payable                                                  109,900

Accounts Payable                                            109,000

Unearned Revenue                                         152,000

Common Stock                                            2,200,000

Retained Earnings         <u>                    </u>           <u>3,364,100</u>

Total                               <u>$6,276,900 </u>        <u>$6,276,900</u>

Explanation:

a) Note: the adjustment of the Utilities could have been eliminated to produce the same result, with totals reduced by $5,900.

5 0
3 years ago
Buffalo Corporation purchased warehouse shelving for $96,000, terms 1/10, n/30. At the purchase date, Buffalo intended to take t
Murrr4er [49]

Answer:

Office Equipment (Debit)                  96,000

Accounts Payable (Credit)                96,000

Explanation:

Buffalo Corporation should have made the above stated entry. As the equipment is supposed to start depreciation from the date of purchase (when the asset is available for use as intended by management). Since the corporation intended to take the discount by paying early within the number of days allowed so upon payment the following entry should be made.

Accounts Payable (Debit)                             96,000

Purchase Discount Income (Credit)                9,600

Cash (Credit)                                                  86,400

4 0
3 years ago
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