Alpha Company plans to acquire the netassets of Company Beta, the following dataare available from Company Beta: netincome in year 1: 55000 JD, year 2: 60000JD. Assets include: equipment with FV 10%higher than book value, building with FV5% higher than book value, patents with8% lower than book value, discontinuedgain 600 (year 2), extraordinary loss 1000(year 1), equipment depreciation (eachyear) 14000 JD, building depreciation (eachyear) 9000 JD, patent amortization (eachyear) 12000 JD, salaries exp. 600 JD (eachyear). Compute future earnings.Select one:a. 55390O b. 59610O c. 58190O d. 56810

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Accounting

year). Compute future earnings. Select one: O a. 55390 O b. 59610

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Alpha Company plans to acquire the net
assets of Company Beta, the following data
are available from Company Beta: net
income in year 1: 55000 JD, year 2: 60000
JD. Assets include: equipment with FV 10%
higher than book value, building with FV
5% higher than book value, patents with
8% lower than book value, discontinued
gain 600 (year 2), extraordinary loss 1000
(year 1), equipment depreciation (each
year) 14000 JD, building depreciation (each
year) 9000 JD, patent amortization (each
year) 12000 JD, salaries exp. 600 JD (each
year). Compute future earnings.
Select one:
a. 55390
O b. 59610
O c. 58190
O d. 56810

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