The inventory profit for 2020 and 2021 is given below, Consideration transferred Add: Non controlling interest fair value 1,600,000 400,000 Smashing's acquisition date fair value 2,000,000 Less: Book value of subsidary 1910,000 + 460,000] Excess fair book value (assigned to covenants) Divide by: Useful life Annual amortization (1,370,000) 630,000 20years 31,500 2020 Inventory profit Inventory purchased 310,000 Profit % 60% Cost price 193,750 Gross profit on transfer (310,000 - 193,750) Unsold inventory % 116250 50% Deferred profit 58,125
Dividend Valuation
Dividend refers to a reward or cash that a company gives to its shareholders out of the profits. Dividends can be issued in various forms such as cash payment, stocks, or in any other form as per the company norms. It is usually a part of the profit that the company shares with its shareholders.
Dividend Discount Model
Dividend payments are generally paid to investors or shareholders of a company when the company earns profit for the year, thus representing growth. The dividend discount model is an important method used to forecast the price of a company’s stock. It is based on the computation methodology that the present value of all its future dividends is equivalent to the value of the company.
Capital Gains Yield
It may be referred to as the earnings generated on an investment over a particular period of time. It is generally expressed as a percentage and includes some dividends or interest earned by holding a particular security. Cases, where it is higher normally, indicate the higher income and lower risk. It is mostly computed on an annual basis and is different from the total return on investment. In case it becomes too high, indicates that either the stock prices are going down or the company is paying higher dividends.
Stock Valuation
In simple words, stock valuation is a tool to calculate the current price, or value, of a company. It is used to not only calculate the value of the company but help an investor decide if they want to buy, sell or hold a company's stocks.
How was cost price of $193,750 calculated? can you show me how they got figure?
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On January 1, 2020, Corgan Company acquired 80 p...
Step 2
The inventory profit for 2020 and 2021 is given below,
Consideration transferred
1,600,000
Add: Non controlling interest fair value
400,000
Smashing's acquisition date fair value
2,000,000
Less: Book value of subsidiary [910,000 + 460,000]
(1,370,000)
Excess fair book value (assigned to covenants)
630,000
Divide by: Useful life
20years
Annual amortization
31,500
2020 Inventory profit
Inventory purchased
310,000
Profit %
60%
Cost price
193,750
Gross profit on transfer (310,000 - 193,750]
116250
Unsold inventory %
50%
Deferred profit
58,125
2021 Inventory profit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F052d489f-0569-4cf6-b560-6cc4bc818148%2Fe9338295-cd62-476c-af10-e2b93a6243f8%2Fibt39ai_processed.jpeg&w=3840&q=75)
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