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tankabanditka [31]
3 years ago
7

When negotiating a business acquisition, buyers sometimes agree to pay extra amounts to sellers in the future if performance met

rics are achieved over specified time horizons. How should buyers account for such contingent consideration in recording an acquisition?
a. The fair value of the contingent consideration is expensed immediately at acquisition date.
b. The fair value of the contingent consideration is included in the overall fair value of the consideration transferred, and a liability or additional owners' equity is recognized.
c. The amount ultimately paid under the contingent consideration agreement is added to goodwill when and if the performance metrics are met.
d. The fair value of the contingent consideration is recorded as a reduction of the otherwise determinable fair value of the acquired firm.
Business
1 answer:
Lelechka [254]3 years ago
3 0

Answer:

b. The fair value of the contingent consideration is included in the overall fair value of the consideration transferred, and a liability or additional owners' equity is recognized.

Explanation:

Measuring the fair value of contingent consideration for financial reporting is a complex process – based on a number of variable inputs, unique risk profiles, and potentially complicated payoff structures.

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Frontier Corp. sells units for $57, has unit variable costs of $29, and fixed costs of $164,000. If Frontier sells 10,000 units,
jeka94

Answer:

2.4

Explanation:

Frontier corporation sells unit for $57

The unit variable cost is $29

Fixed cost is $164,000

Frontier sells 10,000 units

The first step is to calculate the contribution margin

= 57-29×10,000

= 28×10,000

= 280,000

Profit = 280,000-164,000

= 116,000

Degree of operating leverage can be calculated as follows

= 280,000/116,000

= 2.4

6 0
3 years ago
The following information is for the Jeffries​ Corporation: Product​ A: Revenue ​$18.00 Variable Cost ​$14.00 Product​ B: Revenu
shusha [124]

Jeffries Corporation's Operating Income from the two products is <em>A. ​$35,000.</em>

The operating income is the difference between the revenue and operating costs (variable and fixed costs).

Data and Calculations:

                             Product A     Product B     Total

Revenue                 $18.00           $21.00

Variable cost            14.00              13.00

Contribution            $4.00             $8.00

Fixed costs                                                 $143,000

Total sales units                                            35,600

Sales mix                  3                        1               4

Sales units             26,700           8,900      35,600

Total contribution$106,800      $71,200  $178,000

Total fixed costs                                          143,000

Operating income                                      $35,000

Thus, the operating income is $35,000.

Read more: brainly.com/question/14815746

 

5 0
2 years ago
Arkansas Corporation manufactures liquid chemicals A and B from a joint process. It allocates joint costs on the basis of sales
Dvinal [7]

Answer:

The company's cost to produce 1,000 gallons of product B is $7,131.25.

Explanation:

This can be calculatd as follows:

Product B share of joint cost = (Product B sales value / (Product B sales value + Product A sales value)) * Cost to split-off point = ($32.20 / ($32.20 + $3.00)) * $5,500 = 0.914772727272727 * $5,500 = 5,031.25

Product B total additional separable process beyond split-off = Additional cost per gallon * Number of gallons of product B produced = $2.10 * 1,000 = $2,100

Therefore, we have:

Company's cost to produce 1,000 gallons of product B = Product B share of joint cost + Product B total additional separable process beyond split-off = 5,031.25 + $2,100 = $7,131.25

Therefore, the company's cost to produce 1,000 gallons of product B is $7,131.25.

4 0
3 years ago
For most producing firms:_______.
irinina [24]

Answer:

letter a is the correct answer

Explanation:

5 0
3 years ago
A business impact analysis (BIA) identifies threats, vulnerabilities, and potential attacks to determine what controls can prote
Anna11 [10]

Answer:

The correct answer is: False.

Explanation:

To begin with, the name of <em>"Business Impact Analysis"</em> or BIA, in the field of business, refers to the strategy or process that focus on the analysis of the organization when an emergency happens and to see how that surprise event has affected the company's operations. So that is why that this method determines and evaluates all the potential effects that the disaster had on the structure of the organization and how that impact could be resolve by the managers and the whole crew of employees.

7 0
3 years ago
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