BUSINESS COLLEGE

Assume an investor purchases the net assets of an investee for the cash purchase price is $50,400. The investor is willing to purchase the investee's business for this amount because the fair value of PPE is $47,040 and the fair value of a (previously unrecognized) customer list is $10,080 (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 $1,680 Accounts payable 3,360
Accounts receivable $3,360 Accrued liabilities 5,040
Inventories 6,720
Current assets 11,760 Current liabilities 8,400
Long-tem liabilities 6,720
PPE, net 16,800 Stockholders' equity 13,440
Total liabilities & equity $28,560 Total assets $28,560
Parts A and B are independent of each other.
A. Provide the journal entry if the investor pays cash and purchases the assets and assumes the liabilities of the investee company.
B. Provide the journal entry if the investor pays cash and purchases all of the stock of the investee's shareholders.

Answers

Answer 1
Answer:

Answer and Explanation:

The Journal entries are shown below:-

A. Cash Dr, $1,680

Accounts receivable Dr, $3,360

Inventories Dr, $6,720

PPE, net Dr, $16,800

           To Accounts payable $3,360

           To Accrued liabilities $5,040

           To Long-term liabilities $6,720

           To Cash $13,440

(Being purchase of the assets and assumption of the liabilities is recorded)

B. Equity investment Dr, $13,440

                 To Cash $13,440

(Being purchase of the assets and assumption of the liabilities is recorded)

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One year ago, you purchased 200 shares of Southern Foods common stock for $7900. Today, you sold your shares for $35.40 a share. During this past year, the stock paid $1.25 in dividends per share. What is your percent return on this investment
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When a famous painting becomes available for sale, it is often known which museum or collector will be the likely winner. Yet, the auctioneer actively woos representatives of other museums that have no chance of winning to attend anyway. Suppose a piece of art has recently become available for sale and will be auctioned off to the highest bidder, with the winner paying an amount equal to the second highest bid. Assume that most collectors know that Janet places a value of $125,000 on the art piece and that she values this art piece more than any other collector. Suppose that if no one else shows up, Janet simply bids $125,000/2 = $5,000 and wins the piece of art.The expected price paid by Kenji, with no other bidders present, is $:_________ Suppose the owner Of the artwork manages to recruit another bidder, Manuel, to the auction. Manuel is known to value the art piece at $8,000. The expected price paid by Kenji, given the presence of the second bidder Manuel, is $:_________
In leading the push for proficient strategy execution and operating excellence, top-level managers need to take the lead on all of the following EXCEPT:_________a. being out in the field and seeing how well operations are going.b. delegating authority to middle and lower-level managers and creating a sense of empowerment among employees to move the implementation process forward.c. gathering information firsthand and gauging the progress beingmade.d. learning the obstacles in the path of good execution and clearing the way for progress.e. holding periodic ceremonies to honor people who excel in displaying the company values and ethical principles.

The annual interest rate on a credit card is 17.99%. If a payment of $200.00 ismade each month, how many months will it take to pay off an unpaid balance of
$2,470.04?

Answers

Answer:

It would take a total of 14.572001 Months to pay off the balance, with interest

Explanation:

$2470.04 Would take 12.6 months to pay off, therefore, you must apply 17.99% yearly interest to this figure.

$2470.04 * .1799 = $444.36 interest

Principal + interest = total

$2470.04 + $444.36=  $2914.4

$2914.4 / $200 = 14.57 months

Final answer:

The calculation of how many months it would take to repay a credit card balance, given an annual interest rate and a fixed monthly repayment, is not straightforward due to the compounding effect of interest. However, without considering interest, this would update around 12.35 months to pay off the balance of $2,470.04 with a monthly payment of $200.

Explanation:

The question relates to the concept of credit card debt repayment. Given an annual interest rate of 17.99%, a monthly payment of $200.00, and a balance of $2,470.04, it will take significantly longer than just dividing $2,470.04 by $200 to pay off the debt. This is because the annual interest rate is compounding on the remaining balance every month.

In order to calculate the exact number of months it would take to pay off the credit card, we'd need to set up and solve a complex mathematical equation which requires a good understanding of logarithms and algebra. In this case, it is best to use a financial calculator or an online credit card repayment calculator. However, on a simple base without accounting for interest, by dividing the balance of $2,470.04 by the monthly payment of $200, it would take approximately 12.35 months to pay off the debt. However, due to the added interest, the actual number of months would likely be greater.

Learn more about Debt repayment here:

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At the end of 2020, Aramis Company has accounts receivable of $800,000 and an allowance for doubtful accounts of $40,000. On January 16, 2021, Aramis Company determined that its receivable from Ramirez Company of $6,000 will not be collected, and management authorized its write-off.a) Prepare the journal entry for Aramis Company to write off the Ramirez receivableb) What is the net realizable value of Aramis Company's accounts receivable before the write off of the Ramirez receivable?


c) What is the net realizable value of Aramis Company's accounts receivable after the write off of the Ramirez receivable?

Answers

Answer:

A.

Journal entry for write off the Ramirez receivable

Debit Allowance for doubtful Accounts $6,000

Credit Accounts receivables $6,000

B.

Net realizable Receivables (beginning balance)

= accounts receivable of $800,000 Less allowance for doubtful accounts of $40,000

Net realizable receivable = $760,000

C.

Net realizable Receivables (closing balance)

= accounts receivable of $800,000

Less adjustment for write off $6,000

Closing Accounts receivables balance $794,000

Less

Opening allowance for doubtful accounts of $40,000

Less debt write off $6,000

Closing allowance for doubtful account = $34,000

Closing Net realizable receivable = $760,000

Which of the following is not a concern in using ratio analysis?a. We don't know an 'optimal' value for ratios..b. We cannot find adequate industry averages.c. There may be accounting differences.d. Ratios do not give us answers to how to 'fix' an organization.e. All of the above are concerns.

Answers

Answer:

b. We cannot find adequate industry averages

Explanation:

  • Ratio analysis is a process for determining also to interpret the relationship between the items of financial statements. It aims to provide a meaningful understanding of the position of the organization.
  • There are five basic types of ratios as the profitability, the liquidity, the activity, debt, and market thus its use for an intra and inter-firm comparison, useful in locating weaker areas, helpful in addressing the operating efficiency and simplifies accounting data.

Your uncle will sell you his bicycle shop for $250,000, with "seller financing," at a 6.0% nominal annual rate. The terms of the loan would require you to make 12 equal end-of-month payments per year for 4 years, and then make an additional final (balloon) payment of $50,000 at the end of the last month. What would your equal monthly payments be? $4,029.37


$4,241.44


$4,464.67


$4,699.66


$4,947.01

Answers

Answer:

$4,947.01

Explanation:

In this question, we use the present value formula which is shown in the spreadsheet.  

The NPER represents the time period.

Given that,  

Future value = $50,000

Present value = $250,000

Rate of interest = 6% ÷ 12 months = 0.5 months

NPER = 4 years  × 12 months = 48 months

The formula is shown below:

= PMT(Rate,NPER,PV,-FV,type)

The future value comes in negative

So, after solving this, the answer would be $4,947.01

Assuming you make an additional final (balloon) payment of $50,000 at the end of the last month, your monthly payments is:$4,947.01.

Monthly payment

Based on the given information we would make use of financial calculator to find the PMT by inputting the below data

PMT(Rate,NPER,PV,-FV,type)

Where:

Future value= $50,000

Present value= $250,000

Interest rate= 6%/12 = 0.5%

Nper= 4 years  × 12= 48 months

Hence;

PMT=$4,947.01

Inconclusion your monthly payments is:$4,947.01.

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Monte Services, Inc. is trying to establish the standard labor cost of a typical brake repair. The following data have been collected from time and motion studies conducted over the past month. Actual time spent on the brake repairs 1.0 hour
Hourly wage rate $12
Payroll taxes of wage rate 10%
Setup and downtime of actual labor time 20%
Cleanup and rest periods 30%
of actual labor time
Fringe benefits 25%
of wage rate
a. Determine the standard direct labor hours per brake repairs.
(Round answer to 2 decimal places, e.g. 1.25.)
Standard direct labor hours per brake repair_____________
b. Determine the standard direct labor hourly rate. (Round answer to 2 decimal places, e.g. 1.25.)
Standard direct labor hourly rate __________
c. Determine the standard direct labor cost per brake repair. (Round answer to 2 decimal places, e.g. 1.25.)

Answers

Answer:

a) standard direct labor hours per brake repair = hour spent repairing the brakes + setup time + cleanup time = 1 + (1 x 20%) + (1 x 30%) = 1.5 hours per brake repair

b) standard direct labor hourly rate = hourly wage rate + payroll taxes + fringe benefits = $12 + ($12 x 10%) + ($12 x 25%) = $16.20

c) standard direct labor cost per brake repair = 1.5 x $16.20 = $24.30

A manufacturer contemplates a change in technology that would reduce fixed costs from $800,000 to $600,000, and reduce depreciation expense from $125,000 to $100,000. However, the ratio of variable costs to sales would increase from 68% to 80%. What would be the change in the break-even level of revenues?

Answers

Answer:

break-even level of revenues increases from $2,890,625 to $3,500,000

Explanation:

Break even point is the level of sales at which the company makes neither a Profit nor a loss.

Break -even Sales revenue = Fixed Cost / Contribution Margin Ratio

Old Break -even Sales revenue

Break -even Sales revenue =  ( $800,000 + $125,000)/(1.00-0.68)

                                              =  $925,000/ 0.32

                                              =   $2,890,625

Old Break -even Sales revenue

Break -even Sales revenue =  ( $600,000 + $100,000)/(1.00-0.80)

                                              =  $700,000/ 0.20

                                              =   $3,500,000

                                             
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