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pishuonlain [190]
3 years ago
7

Damon Co. purchased 100% of the outstanding common stock of Smith Co. in an acquisition by issuing 20,000 shares of its $1 par c

ommon stock that had a fair value of $10 per share and providing contingent consideration that had a fair value of $10,000 on the acquisition date. Damon also incurred $15,000 in direct acquisition costs. On the acquisition date, Smith had assets with a book value of $200,000, a fair value of $350,000, and related liabilities with a book and fair value of $70,000. What amount of gain should Damon report related to this transaction?
Business
1 answer:
Tamiku [17]3 years ago
8 0

Answer: the correct answer is $70000

Explanation: the fair value of the shares given plus the fair value of the contingent consideration is the total amount paid by the buyer which is (20000 shares * $10 price per share) = $200000+$10000= $210000.

The gain of the transaction is registered as the net fair value of the acquiree that is $350000-$70000= $280000 less the sum paid by the Acquirer that is $280000-$210000= $70000.

The $15000 in direct acquisition costs are registered as period expenses and not relevant for the calculation of the gain of the transaction.

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Before purchasing a car, John sought advice from his friends and researched auto reviews on the Internet. He also visited car de
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Answer: b. external information search

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External information search occurs when the buyer has no previous knowledge about a product, which then leads them to seek information from personal or public sources or marketer dominated sources especially when the buyer's previous experience is limited inefficient. During the information search, the options available to the buyer are either identified or clarified.

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3 years ago
According to the video, what tasks are commonly performed by Farmworkers instead of by machines? Select three
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Answer:

<u>A: weeding</u>

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3 years ago
Define organization and explain three of the characteristics of organization. Give three examples of organizations, try to inclu
Mekhanik [1.2K]

Answer:

Organization is arranging or coordinating especially in a business, society, or association aspect. Examples of organization could be:

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5 0
2 years ago
Draw five sector of macroeconomic model​
solong [7]

Answer:

Here's my Macroeconomic model.

Explanation:

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8 0
3 years ago
Bulldog Corporation reported taxable income of $925,000 this year, before any deduction for any payment to its sole shareholder
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Answer:

Explanation:

The computation is shown below:

Corporate tax = (Taxable income - bonus expenses) × corporate tax rate

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= $53,550

So, the total income tax would be equal to

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3 years ago
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