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Zielflug [23.3K]
2 years ago
13

What Is margin of safety?

Business
1 answer:
skelet666 [1.2K]2 years ago
5 0

Answer:

Margin of safety is a principle of investing in which an investor only purchases securities when their market price is significantly below their intrinsic value. ... Alternatively, in accounting, the margin of safety, or safety margin, refers to the difference between actual sales and break-even sales

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On January 1, 2021, Consolidated Company purchased 100% of the common stock Avergy Industries for $720,000. On that date, Avergy
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Answer:

b. $ 50,000

Explanation:

Investment cost                    

720000

Book value of net asset

100000

420000

--------------

520000

Excess

200000

Allocated as follows

Land and equipment                              50000

overvaluation of bonds payable            40000

Undervaluation of inventory                    60000

Total                                                          150000

Un allocated amount    

Goodwill                                                    50000

Total                                                        200000

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