Skyline Ltd. is evaluating the purchase of Horizon Co.. The balance sheet of Horizon Co. at December 31, 2023, is as follows: Cash: $40,000 Accounts receivable: $78,000 Inventory: $135,000 Property, plant, and equipment (net): $580,000 Current liabilities: $60,000 Bonds payable: $165,000 Common stock: $250,000 Retained earnings: $358,000 Skyline Ltd. identifies the following adjustments: An allowance for doubtful accounts of $5,000 is required. The inventory value should be increased to $145,000 using FIFO. The fair value of property, plant, and equipment is $650,000. An unrecorded patent valued at $80,000 exists. Current liabilities and bonds payable remain unchanged. Skyline Ltd. pays $1,250,000 for Horizon Co. Calculate the goodwill.

Skyline Ltd. is evaluating the purchase of Horizon Co.. The balance sheet of Horizon Co. at December 31, 2023, is as follows: Cash: $40,000 Accounts receivable: $78,000 Inventory: $135,000 Property, plant, and equipment (net): $580,000 Current liabilities: $60,000 Bonds payable: $165,000 Common stock: $250,000 Retained earnings: $358,000 Skyline Ltd. identifies the following adjustments: An allowance for doubtful accounts of $5,000 is required. The inventory value should be increased to $145,000 using FIFO. The fair value of property, plant, and equipment is $650,000. An unrecorded patent valued at $80,000 exists. Current liabilities and bonds payable remain unchanged. Skyline Ltd. pays $1,250,000 for Horizon Co. Calculate the goodwill.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter14: Statement Of Cash Flows

Section: Chapter Questions

Problem 37E: During 20X1, Craig Company had the following transactions: a. Purchased 300,000 of 10-year bonds...

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Chasse Building Supply Inc. reported net cash provided by operating activities of $243,000, capital expenditures of $112,900, cash dividends of $35,800, and average maturities of long-term debt over the next 5 years of $122,300. What is Chasses free cash flow and cash flow adequacy ratio? a. $94,300 and 0.77, respectively c. $130,100 and 1.06, respectively b. $94,300 and 0.82, respectively d. $165,900 and 1.36, respectively
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