EBK HORNGREN'S COST ACCOUNTING
EBK HORNGREN'S COST ACCOUNTING
16th Edition
ISBN: 9780134475950
Author: Datar
Publisher: PEARSON CO
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Chapter 1, Problem 1.23E

Planning and control decisions. Gavin Adams is the president of Trusted Pool Service. He takes the following actions, not necessarily in the order given. For each action (a–e) state whether it is a planning decision or a control decision.

  1. a. Adams decides to expand service offerings into an adjacent market.
  2. b. Adams calculates material costs of a project that was recently completed.
  3. c. Adams weighs the purchase of an expensive new excavation machine proposed by field managers.
  4. d. Adams estimates the weekly cost of providing maintenance services next year to the city recreation department.
  5. e. Adams compares payroll costs of the past quarter to budgeted costs.
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After reading the case, you will choose one side to assist (you’ve been hired by Dave James OR you’ve been hired by the three Branson brothers). Prepare a Business Valuation Report.  Explain the reasoning for applying any premiums or discounts that other business valuators might use. Discuss limitations, if any, in your report. Given that Branson Trucking possesses a large amount of tangible assets, an asset-based approach can provide a baseline valuation. This method is able to compute the company's net asset value by adding the fair market value of its assets and subtracting liabilities.  Keeping this information in mind, the highlighted information provided in the scenario is as follows:  Total Assets (Fair Market Value): $10,500,000 Total Liabilities: $5,100,000 Net Asset Value: $5,400,000 Net Income (2020): $1,172,000 Retained Earnings: $2,065,000 Application of Premiums and Discounts Control Premium: A control premium is applied to reflect the value of having a controlling…

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EBK HORNGREN'S COST ACCOUNTING

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