Answer:
b. $5m
Explanation:
If we purchase another company for $50m and the company you purchase has assets with a fair value of $75m and liabilities with a fair value of $30m. The amount of goodwill we should record in this transaction is: $5m
Goodwill upon acquisition of companies is derived by subtracting the fair value of NET ASSETS from the TOTAL CONSIDERATION (i.e the price paid to acquire the company)
In the scenario, the value of Net Assets is the value of the fairvalue of the assets less the fair value of the liabilities which is $75 - $30 = $45
While the Total Consideration = $50
Therefore Goodwill = $50m - $45m = $5m
Answer: B. One asset would increase $1,750 and a different asset would decrease $1,750, causing no effect
Explanation:
From the information given in the question, the journal entry at the time of sales will be represented as:
Debit Accounts receivable $1,750
Credit Sales $1750
Now, when the credit receipt is received as illustrated in the question, the journal entry will be:
Debit Cash $1,750
Credit Accounts receivable $1,750
Therefore, one asset would increase $1,750 and a different asset would decrease $1,750, causing no effect.
The correct option is B.
Answer:
The correct answer is D
Explanation:
Corporate strategy is the kind of strategy which plan to select as well as develop the specific markets in which to compete when improving the divisions as well as units of the business.
This strategy involve 2 components, which are moving to new industries and diversification, which states expanding the area of the market.
So, the corporate strategy is the one which determine the boundaries of the business in 3 dimensions like geographic scope, diversification and vertical integration.
Answer: 14.4 years
Explanation:
You can use the Rule of 72 to find out.
The Rule of 72 is a very useful formula that shows the amount of time it would take an amount to double given a certain growth rate.
The formula is:
= 72 / Growth rate in whole numbers
= 72 / 5
= 14.4 years
Approximately 14.4 years
