The Legal Environment of Business: Text and Cases
The Legal Environment of Business: Text and Cases
10th Edition
ISBN: 9781337535878
Author: Frank B. Cross; Roger LeRoy Miller
Publisher: Cengage Learning US
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Chapter 1, Problem 3RE
Summary Introduction

Case Summary: The automakers of California file, a suit seeking to prevent the enforcement of a law by California legislature that seeks to curb the emissions of carbon dioxide substantially from all automobiles within their territory. The automakers contend that a federal law already exists that puts a cap on the emission of carbon dioxide indirectly by enforcing fuel economy standards nationwide. The manufacturers claim that natural justice is being denied to them because of the harsher restrictions placed by the Californian law.

To Explain: The primary source of law used in this case.

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The standard cost of Wonder Walkers includes 3 units of direct materials at $9.00 per unit. During July, the company buys 40,000 units of direct materials at $8.25 and uses those materials to produce 15,000 units. Compute the total, price, and quantity variances for materials.
Branson paid $465,000 cash for all of the outstanding common stock of Wolfpack, Incorporated, on January 1, 2023. On that date, the subsidiary had a book value of $340,000 (common stock of $200,000 and retained earnings of $140,000), although various unrecorded royalty agreements (10-year remaining life) were assessed at a $100,000 fair value. Any remaining excess fair value was considered goodwill. In negotiating the acquisition price, Branson also promised to pay Wolfpack's former owners an additional $50,000 if Wolfpack's income exceeded $120,000 total over the first two years after the acquisition. At the acquisition date, Branson estimated the probability-adjusted present value of this contingent consideration at $35,000. On December 31, 2023, based on Wolfpack's earnings to date, Branson increased the value of the contingency to $40,000. During the subsequent two years, Wolfpack reported the following amounts for income and dividends: Dividends Declared Year Net Income $ 65,000…
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