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Ghella [55]
3 years ago
15

The notes to a recent annual report from Weebok Corporation indicated that the company acquired another company, Sport Shoes, In

c. Assume that Weebok acquired Sport Shoes on January 5 of the current year. Weebok acquired the name of the company and all of its assets for $511,000 cash. Weebok did not assume the liabilities. The transaction was closed on January 5 of the current year, at which time the balance sheet of Sport Shoes reflected the following book values and an independent appraiser estimated the following market values for the assets:
Sport Shoes, Inc.
January 5 of the Current Year Book Value Market Value
Accounts receivable (net) $35,000 $35,000
Inventory 210,000 183,000
Fixed assets (net) 23,000 46,500
Other assets 10,000 16,000
Total Assets $278,000
Liabilities $72,000
Stockholders' equity 206,000

Market values for the purchased assets were provided to Weebok by an independent appraiser.

Required:
Compute the amount of goodwill resulting from the purchase.
Business
1 answer:
ikadub [295]3 years ago
8 0

Answer: $230,500

Explanation:

Goodwill is the amount over the value of a company that is purchased for.

Fair market value is the relevant value used in goodwill calculation because it represents the current value of the assets acquired.

Goodwill = Acquisition price - Fair market values of the assets

= 511,000 - 35,000 - 183,000 - 46,500 - 16,000

= $230,500

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Answer:

It might lead to over-optimistic projections

Explanation:

In simple words, the problem with using profitability index as the index criteria lies with the procedure of estimating it. In order to consider the business situation, the organisational finance group requires to settle with the corporation supervisors.

Leadership may be too enthusiastic about their assignment, so forecasts for cash flow may be too substantial. Consequently, in predicting the profitability index, there may be an uptrend prejudice.

3 0
3 years ago
What does daw mean? select one: a. dispense after waiver has been signed b. dispense as written c. drugs in adjudication this we
Monica [59]

The DAW mean dispense after written. Dispense as written refers to the prescriber's instructions regarding authorization for substitutes with generic counterparts or ordering of the specific prescribed drug with "DO NOT SUBSTITUTE" the instructions on the prescription.

A DAW code indicates the prescriber's instructions to the payer for the  generic equivalent substitute or dispense of the specific prescription drug. when the member expressly requests the brand-name drug over the generic version at the pharmacy In both cases, the plan continues to pay the high cost of the brand-name drug so that the member's access to the medication is not disrupted.

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3 0
1 year 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
What describes a lease provision that gives the tenant the right to extend the lease for an additional period of time and sets f
photoshop1234 [79]

Answer:

that;s

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5 0
2 years ago
When an administrative assistant reorders office supplies for a business, placing the same order as last month without checking
belka [17]

Answer:

The correct answer is straight rebuy.

Explanation:

The straight buyback is a routine, low participation purchase. A minimum of information is needed and consideration of alternatives is not necessary. This type of purchase is handled by the purchasing department and is usually acquired from a list of approved suppliers. Examples of straight repurchase are repeating purchases of office supplies, and small parts.

4 0
3 years ago
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