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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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Matthew manages the sales team at an information technology (IT) firm. His focus is to conduct business in accordance with his f
Romashka-Z-Leto [24]

Answer: utilitarian

Explanation:

Utilitarianism: this is one of the oldest, best known and most influential moral theories.

Like other forms of moral theories, its core principles is that whether an action is morally right or wrong depends on the final outcome or effects of such actions.

To be more specific, the only effects of actions that are relevant here are the good and bad results that they produce that such action produces nothing else matters.

7 0
3 years ago
Swan Finance Company, an accrual method taxpayer, requires all of its customers to carry credit life insurance. If a customer di
posledela

Answer:

Recognize an income/loan repayment of $1,300, and cancel the debt of $200 from the earlier recognition of income

Explanation:

Swan would only recognize an income/loan repayment of $1,300 having already recognized an initial income of $200 of the $1,500 owed before the death of the customer.

Accounting entries would be as follows.

Debit Bank account: $1,500

Credit income/loan repayment account: :1,300

Credit receivables: $200.

The credit of $200 in receivables would be treated as shown above due to the income of $200 already recognised and which would have been treated as follows when it was recognized,

Dr: receivables $200

Cr. interest earned $200,

7 0
3 years ago
Water World sells wake boards and water skis and pays sales commissions based on product sales price. The wake boards sell for a
victus00 [196]

Answer:

Salespersons will be motivated to sell more wake boards as they will create a higher commission per unit for them.

The company would rather see more skis sold as it creates the higher profit per unit for the company.

Explanation:

As from the company's perspective the sales of skies shall be more, as it offers higher revenue per unit, in form of higher contribution than that of boards per unit, the company estimates to sell more of these units.

Further, as the sales commission is based on the price of article sold, and boards have higher selling price,

As sales commission is to be earned by individual acting as agent will sell more units of boards to get higher commission.

3 0
3 years ago
Debra is the day-shift supervisor at a company that manufactures and supplies plastic bottles to pharmaceutical companies. She i
JulsSmile [24]

I believe the answer is: First-line manager

First-line managers refers to the manager that directly supervise the production process on site. First-line manager typically does not involved during the creation of long-term planning, but they would had the first-hand information regarding employees performance and the type of problems that exist with the clients.

5 0
3 years ago
A decision to position the product on high-performance quality will mean that the ________. marketer must boost derived demand i
Virty [35]
<span>A decision to position the product on high-performance quality will mean that the seller must charge a higher price to cover higher costs.

When a company uses higher quality products to market their product as high-performance quality it means that the product will cost more to make and will sell for a higher price. The company has to cover all of their costs and one way to do that is to make sure their price point is set correctly. 
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3 0
3 years ago
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