RiverRocks (whose WACC is 11.6%) is considering an acquisition of Raft Adventures (whose WACC is 14.8%). What is the appropriate discount rate for RiverRocks to use to evaluate the acquisition? Why? The appropriate discount rate for RiverRocks to use to evaluate the acquisition is %. (Round to one decimal place.)
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- RiverRocks (whose WACC is 11.8%) is considering an acquisition of Raft Adventures (whose WACC is 15.2%). The appropriate discount rate for RiverRocks to use to evaluate the acquisition is ___ %? What is the appropriate discount rate for RiverRocks to use to evaluate the acquisition? Why? A. Raft Adventures' WACC is the most appropriate discount rate to account for the risk of Raft Adventures' cash flows. B. RiverRocks' WACC is the most appropriate discount rate to account for the risk of Raft Adventures' cash flows. C. An average WACC from RiverRocks and Raft Adventures will best account for the risk of Raft Adventures' cash flows. D. The risk-free rate will best account for the risk of Raft Adventures' cash flows since RiverRocks will pay cash for the transaction.Island, Inc. made a basket purchase involving four assets. Their market values were A: $56,000; B: $42,000 C: $44,000; and D: $58,000. The price Island paid for the four assets was $145,000. To the nearest dollar, what final price will be recorded for asset D? (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.) ... O A. $3,000 O B. $31,900 O C. $42,050 O D. $58.000On January 1, 2020, Marshall acquired an investment for P500,000 plus a purchase commission of P10,000. The investment is designated as financial asset at fair value through other comprehensive income. On December 31, 2020, quoted market price of the investment is P500,000. If the investment were sold, a commission of P15,000 would be paid. On December 31, 2020, the investment should be carried at A.P485,000B.P500,000C.P495,000D.P510,000
- On January 1, 2020, Azure Corporation purchased Sparrow Corporation for $20 million. Of the $20 million purchase price, $2 million was allocated to goodwill. What is Azure’s amortization deduction related to the goodwill for 2020? Round your answer to the nearest whole dollar.V6. A company purchases land, building and equipment for $1,500,000. An independent appraisal shows that the best available indications of fair value at the time of purchase are: land: $760,000; building: $540,000; and equipment: $320,000. The purchase is financed through long-term debt. Required: Prepare the journal entry to record the purchase Prepare the journal entry to record the purchase:Zoom owns 50 non-financial assets. It has the ability to purchase those assets from four markets (with same specification) and wishes to measure their fair values for the purpose of the revaluation policy. Four markets currently exist for this type of non-financial asset; Zoom has transacted regularly in three of them. At measurement date, the volume, prices and various costs of each non-financial asset in each respective market are as follows: Market Sale price Past volume with Zoom Total market volume Transaction costs Transport costs East $46,000 1,200 180,000 $500 $400 South $46,000 1,500 150,000 $400 $700 West $45,000 0 200,000 $300 $600 North $45,000 1,700 120,000 $200 $500 Based on the above information, which market is the most advantageous market (if principle market is restricted) and what is the fair value of all 50 non-financial assets under the most advantageous market as at the measurement date assuming that the current use of this type of non-financial…
- On December 31, 2020, IVORYInc.’s investment in real property has a carrying value of P10,000,000 accounted for under the fair value model, before considering market value adjustment. The fair market value of the asset on December 31, 2020, is P6,500,000. How much should be the gain or loss on changes in fair value?Lexington Garden Supply pays $280,000 for a group purchase of land, building, and equipment. At the time of acquisition, the land has a current market value of$124,000, the building's current market value is $31,000, and the equipment's current market value is $155,000. Prepare a schedule allocating the purchase price of$280,000 to each of the individual assets purchased based on their relative market values, then journalize the lump-sum purchase of the three assets. The businesssigns a note payable for the purchase price.On January 01, 2020, Sisig Corp. acquired an investment property, and the initial cost of the investment property was P5,000,000. On the acquisition date, the company chooses the cost model to account for its investment. As of December 31, 2020, it has a carrying value of P4,900,000 and a fair value of P5,100,000.On December 31, 2021, the company decided to transfer the investment property to owner-occupied property that is also under the cost model. On the date of transfer, the fair value of the property is P5,000,000 while its carrying value was P4,800,000. What amount of gain or loss on transfer should the company recognize on December 31, 2021? a. P300,000 loss b. P200,000 loss c. No gain or loss d. P100,000 loss
- An entity accounted for land using the revaluation model. On October 1, 2020, the entity classified the land as held for sale. At that date, the carrying amount of the land was P5,000,000 and the balance in the revaluation surplus was P1,500,000. At the same date, the fair value of the land was estimated at P5,500,000. The estimated cost of disposal is P100,000. On December 31, 2020, the fair value less cost of disposal of the land did not change. On October 1, 2021, the land was sold for P7,000,000.What amount of OCI is classified to retained earnings in 2021?An entity accounted for land using the revaluation model. On October 1, 2020, the entity classified the land as held for sale. At that date, the carrying amount of the land was P5,000,000 and the balance in the revaluation surplus was P1,500,000. At the same date, the fair value of the land was estimated at P5,500,000. The estimated cost of disposal is P100,000. On December 31, 2020, the fair value less cost of disposal of the land did not change. On October 1, 2021, the land was sold for P7,000,000.What amount of OCI is classified to retained earnings in 2021? * 1,500,000 2,000,000 500,000 ZeroAn entity accounted for land using the revaluation model. On October 1,2020, the entity classified the land as held for sale. At that date, thecarrying amount of the land was P5,000,000 and the balance in therevaluation surplus was P1,500,000. At the same date, the fair value of theland was estimated at P5,500,000. The estimated cost of disposal isP100,000. On December 31, 2020, the fair value less cost of disposal ofthe land did not change. On October 1, 2021, the land was sold forP7,000,000.What amount of OCI is classified to retained earnings in 2021? A. 1,500,000B. 2,000,000C. 500,000D. Zero