On January 1, 200X, Cale Corp. paid $1,020,000 to acquire Kaltop Co. Kaltop maintained separate incorporation. Cale used the equitymethod to account for the investment. The following information is available:Fair ValueCurrent assetsLandBuilding (20 year life)Equipment (10 year life)Current liabilitiesLong term liabilitiesBook Value$120,000$72.000$240.000$540,000$24,000$120.000$228.000$384.000$216,000$120,000$192.000$268.000$516.000$24.000$120,000Common stockPaid in capitalRetained earningsKaltop earned net income for 200X of $126,000 and paid dividends of $48,000 during the year.2The 200X total amortization of allocations (this is the additional expense caused by the increases/decreases in market value) is calculated to be

Name: On January 1, 200X, Cale Corp. paid $1,020,000 to acquire Kaltop Co.
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: On January 1, 200X, Cale Corp. paid $1,020,000 to acquire Kaltop Co. Kaltop maintained separate incorporation. Cale used the equitymethod to account for the investment. The following information is available:Fair ValueCurrent assetsLandBuilding (20

The amortization of the allocations of the assets which has been either increases or decreased due…

Answered: The 200X total amortization of…

Business

Accounting

The 200X total amortization of allocations (this is the additional expense caused by the increases/decreases in market value) is calculated to be

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Only one of the methods of evaluating capital investments discussed in Chapter 26 utilizes the…

A: The correct answer to the question is "b. Accounting Rate of Return".Accounting Rate of Return =…

Q: What is the NPV of the following cash flows if the required rate of return is 0.09? Year 0…

A: Required rate of return = 0.09 Year Cash flow 0 -6816 1 3577 2 3505 3 2732 4 3757

Q: 2. Let the force of interest be 8(t) = 0.06 when t is between 0 and 10 and 8(t) = 0.06+.01(t-10) for…

Q: Value-in-use is O a. The discounted present value of future cash flows arising from use of the asset…

A: Value-in-use:-It is future cash inflows and outflows which arise from the continuous use of assets…

Q: 1. Compute the IRR for the investment represented by the following cash flow table: Year 0. 1 3 4 6.…

A: An internal rate of return or IRR is referred to as the metric, which are used in the financial…

Q: 26. Based on PAS 2. which of the following statements best fit the description of the hết ledl…

A: For calculating the Net realizable value we need to determine the value of the market assets then we…

Q: c) You are given the following pay-offs of three acts A1, A2 and A3, and the states of nature S1, S2…

A: The Expected Monetary Value (EMV) is a statistical measure used in decision analysis to represent…

Q: The future value of a single sum A. is generally larger than the present sum. B. decreases…

A: The future value (FV) is the value of an investment or sum of money at a specified future date,…

Q: Use available information to forecast incremental earnings what are the NWCs and ∆NWCs and forecast…

A: 0 1 2 3 4 5 1 COGS -11000 -11000 -11000 -11000 2 OPENING STOCK 0 0 0 0…

Q: The actual return on plan assets __is equal to interest expenses accrued each year on the…

A: Plan assets refer to long term assets held for the benefit of employees. It includes long term…

Q: While calc

A: Free cash flow is usually generated from its business operations after minus the capital expenditure…

Q: The incremental cash flows of leasing consider which of the following?I. cost of the assetII. lease…

A: The objective of this question is to identify the factors that are considered when calculating the…

Q: ersity are from the metropolitan area and visit their hc zes that few good commuting alternatives…

A: The cashback period refers to the time frame it takes to recover the cost of an asset or investment.

Q: If a capital investment is $28,048 and equal annual cash inflows are 62,605.3, state the internal…

A: Solution: Internal rate of return factor is arrived at by dividing capital investment by annual cash…

Q: Consider the following cash flows: Year 0 1 2 3 4 Cash Flow -$ 7,600 2,150 4,900 1,950 1,650 What is…

A: Payback Period is the time taken by cash flows of the project to recover the initial cost of…

Q: Cullumber Inc. owns and operates a number of hardware stores in the Atlantic region. Recently, the…

A: A company can either purchase an asset or take it on the lease after evaluating the costs and…

Q: In the discounted cash flow (DCF) method, which of the following is the correct formula for…

A: EBIT represents the operating profit of a company before deducting interest and taxes.It's the…

Q: b. The cash payback period. years c. The net present value. Use the above table of the present value…

A: (a) Average Rate of Return = 25% (b) Payback Period = 4 Year (c) Net Present Value = $ 66,495

Q: Question 3.Match the following terms with the appropriate definition.Future ValueTime value of…

A: Future value is the amoutn received at the end of future period along with interest.Time value of…

Q: could someone please help me out

A: As per the guidelines, the solution for the first three parts is given. For getting answers for the…

Q: What is the IRR for the following project if its initial after-tax cost is R5 000 000 and it is…

A: IRR is the rate of return which the project generates over its useful life.

Q: Suppose that the allocation of a natural resource during three years results in a stream of total…

A: c) Computation:

Q: In using the two-step approach to Enterprise Valuation (EV), where EV = the Present Value of…

A: Terminal value is the value of stable growth period at the end of planning period or high growth…

Q: Determine the future value of the following single amounts (FV of $1. PV of $1. FVA of $1. PVA of…

A: The future value is computed by multiplying the invested amount by the future value factor. The…

Q: ■ PA P1 = & PB P1 = p=100] [p = 200] Find the expected pay off assets A and B under probability…

A: Expected payoff is the most likely payoff that is possible under given condition of uncertainty and…

Q: Which of the following methods should be used when the expected benefits to be received from an…

A: the straight-line method of depreciation is used when the benefits from the assets are uniform…

Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

Topic Video

Question

On January 1, 200X, Cale Corp. paid $1,020,000 to acquire Kaltop Co. Kaltop maintained separate incorporation. Cale used the equity
method to account for the investment. The following information is available:
Fair Value
Current assets
Land
Building (20 year life)
Equipment (10 year life)
Current liabilities
Long term liabilities
Book Value
$120,000
$72.000
$240.000
$540,000
$24,000
$120.000
$228.000
$384.000
$216,000
$120,000
$192.000
$268.000
$516.000
$24.000
$120,000
Common stock
Paid in capital
Retained earnings
Kaltop earned net income for 200X of $126,000 and paid dividends of $48,000 during the year.
2
The 200X total amortization of allocations (this is the additional expense caused by the increases/decreases in market value) is calculated to be

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Assumption

VIEW

Step 2: Computation of total amortization of allocations in 200X

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

What is the NPV of the following cash flows if the required rate of return is 0.13? Year 0 1 2 3 4 CF -3,241 2,952 1,242 3,310 1,616 Enter the answer with 2 decimals (e.g. 1000.23).
What is the NPV of the following cash flows if the required rate of return is 0.09? Year 0 1 2 3 4 CF -4,529 2,431 572 1,804 3,132 Enter the answer with 2 decimals (e.g. 1000.23).
Consider the following timeline: Date 0 i + $500 2 OA. $666. B. $605. C. $500. OD. $650. 3 Cash flow If the current market rate of interest is 10%, then the future value of the cash flows on this timeline is closest to:
Distinguish between annual income in the presence of depreciation and annual operating cash flow?
Consider the following cash flows: Year 01234 Cash Flow -$5,100 1,500 2,600 1,300 1,000 What is the payback period for the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Payback period years
Consider two assets with the following cash flow streams: Asset A generates $4 at t=1, $3 at t=2, and $10 at t=3. Asset B generates $2 at t=1, $X at t=2, and $10 at t=3. Suppose X=6 and the interest rate r is constant. For r=0.1, calculate the present value of the two assets. Determine the set of all interest rates {r} such that asset A is more valuable than asset Draw the present value of the assets as a function of the interest rate. Suppose r=0.2. Find the value X such that the present value of asset B is 12. Suppose the (one-period) interest rates are variable and given as follows: r01=0.1,r12=0.2, r23=0.3. Calculate the yield to maturity of asset A. (You can use Excel or ascientific calculator to find the solution numerically.)
If the profit margin is 0.1142, asset turnover is 0.5619 and financial leverage is 1.2937, what is the return on asset? Multiple Choice 0.1142 0.7269 0.0830 0.0642
Here are cash flows for a project under consideration. C(0)= -$8160, C(1)=6180, and C(2)=20280. What is the IRR of the project?
b. If South Pangean expenditures are $30 million without interest payments, that means its expenditures with interest payments are $ Emillion.
3. If a capital investment is $28,752.7 and equal annual cash inflows are 69,943.5, state the internal rate of return factor rounded to two decimal places.
What is the Modified Internal Rate of Return of Mazgaon using the reivestment approach if the nterest rate is 7 percent? Year Cash Flows 0 −$27,400 1 10,750 2 21,900 3 9,960 4 −3,800
Consider the following cash flows: Year Cash Flow -$6,600 1,900 3,900 1,700 1,400 What is the payback period for the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Payback period years 0123 4