1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Flauer [41]
2 years ago
7

Assume an investor purchases the net assets of an investee for the cash purchase price is $75,600. The investor is willing to pu

rchase the investee's business for this amount because the fair value of PPE is $70,560 and the fair value of a (previously unrecognized) customer list is $15,120 (the fair values of all other assets and liabilities are equal to their book values). The investee company reports the following balance sheet on the acquisition date:
Cash $2,800 Accounts payable $5,600
Accounts receivable 5,600 Accrued liabilities 8,400
Inventories 11,200 -
Current assets 19,600 Current liabilities 14,000
Long-term liabilities 11,200
PPE, net 28,000 Stockholdersâ equity 22,400
Total assets $47,600 Total liabilities and equity $47,600

Required:
Provide the journal entry if the investor pays cash and purchases the assets and assumes the liabilities of the investee company (assume that the fair value of the assets is equal to their book values).
Business
1 answer:
maxonik [38]2 years ago
4 0

Answer and Explanation:

The journal entry is given below;

Cash                         $2,800

Account receivable $5,600

Inventories                $11,200

PPE                            $28,000

     To Account payable $5,600

     To Accrued liabilities $8,400

     To Long term liabilities  $11,200

     To Cash                          $22,400

(Being the cash is paid is recorded)

Here all the assets are debited as it increased the assets and credited all the liabilities except cash as it increased the liabilities and the remaining balance left would be credited to cash account

You might be interested in
The owner of Cafe Bakka is considering investing in a new point-of-sale system. He spent $10,000 on his current point-of-sale sy
Westkost [7]

Answer

The answer and procedures of the exercise are attached in the following archives.

Explanation  

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  

6 0
3 years ago
What are a firms four major financial needs?
TEA [102]
Here are the four major needs:

7 0
3 years ago
In general terms, how would a change in investment opportunities affect the payout ratio under the residual payment policy?
adell [148]

Companies with residual dividend policies priorities paying capital expenditures out of earnings.

<h3>What is payout ratio?</h3>

The payout ratio, which is calculated as a percentage of the firm's total earnings, demonstrates the part of earnings that a company distributes to its shareholders in the form of dividends. By dividing the total dividends given out by the net income made, the computation is arrived at.

For dividend investors, the dividend payout ratio is a crucial indicator. It demonstrates how much of a company's earnings are distributed to investors. The higher that number, the less cash a corporation has left over to fund dividend growth and corporate expansion.

Companies with residual dividend policies priorities paying capital expenditures out of earnings. Any unused revenues are then used to pay dividends. Long-term debt and equity are often both parts of a company's capital structure.

To learn more about payout ratio refer to:

brainly.com/question/13083753

#SPJ4

6 0
1 year ago
You are to receive the following payments at the end of the following periods:
dangina [55]

Answer: $12,113.14

Explanation:

Find out the future value of each payment 20 years from now then sum up the values.

Year 1:

= 250 * ( 1 + 15%)¹⁹

= $3,557.94

Year 2:

= 300 * ( 1 + 15%)¹⁸

= $3,712.636

Year 3:

= 450 * ( 1 + 15%)¹⁷

= $4,842.5688

Future value of all:

= 3,557.94 + 3,712.636 + 4,842.5688

= $12,113.14

4 0
2 years ago
A company is preparing its cash budget for the coming month. All sales are on account. Given the following: Beginning Balances B
iVinArrow [24]

Answer:

$56,000

Explanation:

Given the above information, we will calculate first the total cash flow.

Total cash flow = Opening cash receivable + Sales - Ending cash receivables

= $196,000 + $880,000 - $226,000

= $850,000

Ending cash balance = Opening cash balance + Total cash flow - Cash disbursement

= $146,000 + $850,000 - $940,000

= $56,000

6 0
3 years ago
Other questions:
  • Trini Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 8,100
    5·1 answer
  • Oliver Brush Company sells standard hair brushes. The following information summarizes Oliver​'s operating activities for 2018
    6·1 answer
  • Nick and Teresa are debating the pricing strategy of several airlines. Nick argues, "When airlines restrict discounted tickets t
    8·1 answer
  • This chart represents different workplaces. Circles A, B, and C are particular to certain career pathways and D represents a typ
    8·2 answers
  • Employees at Between the Rounds believe that the company is fair to all employees, regardless of their age, gender, race, ethnic
    14·1 answer
  • If your college leadership sought your advice on setting tuition, why would it matter if your college was the only college for m
    12·1 answer
  • Which statement best explains the law of demand?
    10·2 answers
  • What is it called when <br> Money can be saved whereas goods often cannot
    6·2 answers
  • What are financial institutions and why are they so important
    13·1 answer
  • Taylor is analyzing the effects of wage rates on the supply of laptop computers. by using the ceteris paribus assumption, taylor
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!