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IrinaVladis [17]
3 years ago
7

Splish Company exchanged equipment used in its manufacturing operations plus $4,320 in cash for similar equipment used in the op

erations of Blossom Company. The following information pertains to the exchange. Splish Co. - Blossom Co. Equipment (cost) - $40,320 - $40,320 Accumulated depreciation - 27,360 - 14,400 Fair value of equipment - 18,000 - 22,320 Cash given up - 4,320a) Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance.b) Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange has commercial substance.
Business
1 answer:
velikii [3]3 years ago
4 0

Answer:

A) without commercial substance

Splish Company

Dr Equipment new 17,280 (book value of old equipment + cash)

    Cr Equipment old 12,960

    Cr Cash 4,320

   

Blossom Company

Dr Equipment new 21,600 (book value of old equipment - cash)

Dr Cash 4,320

    Cr Equipment old 25,920

Since the boot value is less than 25% of the carrying value of the asset, no gain or loss must be recognized. When you are preparing the journal entries, you must record the carrying value of the asset +/- any boot value given or taken included in the exchange.

B) with commercial substance

Splish Company

Dr Equipment new 22,320 (FMV)

Dr Accumulated depreciation - equipment old 27,360

    Cr Equipment old 40,320

    Cr Cash 4,320

    Cr Gain on exchange 5,040

Blossom Company

Dr Equipment new 18,000 (FMV)

Dr Accumulated depreciation - equipment old 14,400

Dr Cash 4,320

Dr Loss on exchange 3,600

    Cr Equipment old 40,320

   

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faltersainse [42]

Answer:

What is the enterprise value-EBITDA multiple for this company?

2,46

Explanation:

The ratio of EV/EBITDA is used to compare the entire value of a business with the amount of EBITDA it earns on an annual basis.  This ratio tells investors how many times EBITDA they have to pay, were they to acquire the entire business.

EV = market capitalization + preferred shares + minority interest + debt - total cash  

EV=586000-25000+196000  

 

 

EBIT = EBITDA - Depreciation  

 

EBITDA=EBIT+Depreciation  

EBITDA=97000+141000  

EBITDA=238000  

 

EV/EBITDA= 586000/238000

 

EV/EBITDA= 2,46

7 0
3 years ago
What are the phases in a business cycle?
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Recovery, Prosperity, Recession and Depression
8 0
3 years ago
In a recent annual report, Apple Computer reported the following in one of its disclosure notes: "Warranty Expense: The Company
Wewaii [24]

Answer:

The Matching principle.

Explanation:

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3 0
4 years ago
Which of the following is NOT an element of organizational structure? A) Well-articulated mission, vision, and value statements.
alekssr [168]

Answer:

A) Well-articulated mission, vision, and value statements.

Explanation:

An organizational structure can be defined as a system that states how business activities such as standard rules, task allocation or roles of employees, coordination, responsibilities and supervision of these activities are directed so as to enhance the achievement of the goals, aims and objectives of the organization.

Simply stated, an organizational structure usually defines a hierarchy, which is used to determine how information, roles and responsibilities flow from one level to another in an organization. Generally, the flow of information are usually from top to bottom.

Furthermore, the organizational structure can be divided into four (4) distinct categories and these are;

1. Matrix organizational structure.

2. Functional organizational structure.

3. Divisional organizational structure.

4. Flat organizational structure.

The following are the elements of organizational structure;

A. Formal reporting relationships. This is enhanced by assigning a hierarchy, where informations are reported to the right individual and in a timely manner as well.

B. Grouping together of individuals into departments. This is to increase the level of output and enhance building good, coordinated development through division of labor.

C. Systems designed to ensure effective communication.

<em>Hence, a well-articulated mission, vision, and value statements isn't an element of organizational structure. It could be regarded as an organization's center of gravity. </em>

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Name at least one other familiar item besides money that could serve as a model for isotopes
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