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Flauer [41]
3 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]3 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

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Alexandra [31]

Answer:

The correct answer would be option D, Legal Market for a market price that is lower.

Explanation:

If there is a store which sells the goods at the market price even though the government authorities have set the minimum price that can be charged, it means store is selling the product at a price which is higher than the minimum price set by the government, but it doesn't mean that the store owner is doing any illegal trading. This is because the government has set the lower price limit but that ceiling price is non binding. It is not necessary for the market sellers to sell at the price given by government. So they are operating in a legal market for a market price that is lower.

4 0
3 years ago
Would you rather be a juvenile prosecutor or defense attorney? Explain your decision.
balandron [24]

Answer:

<u>a defense attorney instead</u>

<u>Explanation:</u>

From a financial standpoint, a <u>defense attorney</u> would more likely make more money than a<u> juvenile prosecutor</u> because a defense attorney could charge up more for certain cases than been a juvenile prosecutor who wants to ensure someone is convicted.

Also, in terms of purpose, I do feel a defense lawyer could make more impact socially by defending his or her clients.

6 0
3 years ago
Leader Corporation Company uses a job-order costing system with a single plantwide pre-determined overhead rate based on machine
taurus [48]

Answer:

Selling price per unit= $196

Explanation:

<u>First, we need to calculate the predetermined overhead rate:</u>

<u></u>

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Predetermined manufacturing overhead rate= (400,000 / 50,000) + 6

Predetermined manufacturing overhead rate= $14 per machine hour

<u>Now, we can allocate overhead and calculate the total cost:</u>

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Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 14*100= $1,400

Total cost= 1,400 + 750 + 2,750

Total cost= $4,900

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3 0
3 years ago
How much control does the government exert over businesses in a command economy, and what are some of the associated risks and d
siniylev [52]

The government has total control in a command economy, all production, investment, prices and incomes are determined by the government. A command economy is also known as a communist society because business owners do not have any control over their businesses. In a command economy, there are risks/disadvantages of running operations this way because there is a lack of competition and efficiency. When the government controls everything, there is less competition because pricing is set by the government. There is also less efficiency due to them waiting on the government to make their decisions.

5 0
3 years ago
Ben &amp; Jerry's, an ice cream manufacturer, is evaluating their strategies for days of supply. Typically, organizations with p
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Answer:

False

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7 0
3 years ago
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