Explain the reason why Company A acquire Company M.

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Answer 1

Question

Chapter 2, Problem 4DYS

1.

To determine

Explain the reason why Company A acquire Company M.

2.

To determine

Explain the way in which the consideration transferred allocated between cash paid and the contingent consideration.

3.

To determine

Provide a schedule showing Company A’s allocations of the consideration transferred to the identifiable assets acquired and liabilities assumed with the remainder going to goodwill.

4.

To determine

Compute the maximum potential contingent payout (i.e., earn out) to the former owners of Company M. Although not explicitly stated in Company A’s fiscal 2015 10-K report (for the year ended March 31, 2015), Explain some possible factors that entered into the determination of the acquisition-date fair value of the contingent consideration.

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4. ABG produces and sells a single product at the price of 20 euros. During its first year of operation (20X7), the company had no initial stocks. The production cost of a product unit is as follows: Variable production cost of 8 euros per unit. Fixed production cost 9,600 euros. Also, the company has fixed sales expenses of 5,400 euros. In the first year of operation, the company had budgeted that it would produce and sell 3,200 units of product. In fact, during the period production and sales amounted to 3,200 units of product. Requested: To calculate the operating result of the company for the first year of its operation using absorption and marginal costing. Calculate the operating result of the company for the first year of its operation using absorption and marginal costing, assuming that sales for the period amounted to 2,700 units and 500 units remained as final inventory. What is the value of the final inventory of stocks with both costing techniques in this case?

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Answer 2

Question

Chapter 2, Problem 4DYS

1.

To determine

Explain the reason why Company A acquire Company M.

2.

To determine

Explain the way in which the consideration transferred allocated between cash paid and the contingent consideration.

3.

To determine

Provide a schedule showing Company A’s allocations of the consideration transferred to the identifiable assets acquired and liabilities assumed with the remainder going to goodwill.

4.

To determine

Compute the maximum potential contingent payout (i.e., earn out) to the former owners of Company M. Although not explicitly stated in Company A’s fiscal 2015 10-K report (for the year ended March 31, 2015), Explain some possible factors that entered into the determination of the acquisition-date fair value of the contingent consideration.

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Answer 3

Question

Chapter 2, Problem 4DYS

1.

To determine

Explain the reason why Company A acquire Company M.

2.

To determine

Explain the way in which the consideration transferred allocated between cash paid and the contingent consideration.

3.

To determine

Provide a schedule showing Company A’s allocations of the consideration transferred to the identifiable assets acquired and liabilities assumed with the remainder going to goodwill.

4.

To determine

Compute the maximum potential contingent payout (i.e., earn out) to the former owners of Company M. Although not explicitly stated in Company A’s fiscal 2015 10-K report (for the year ended March 31, 2015), Explain some possible factors that entered into the determination of the acquisition-date fair value of the contingent consideration.

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Answer 4

Question

Chapter 2, Problem 4DYS

1.

To determine

Explain the reason why Company A acquire Company M.

2.

To determine

Explain the way in which the consideration transferred allocated between cash paid and the contingent consideration.

3.

To determine

Provide a schedule showing Company A’s allocations of the consideration transferred to the identifiable assets acquired and liabilities assumed with the remainder going to goodwill.

4.

To determine

Compute the maximum potential contingent payout (i.e., earn out) to the former owners of Company M. Although not explicitly stated in Company A’s fiscal 2015 10-K report (for the year ended March 31, 2015), Explain some possible factors that entered into the determination of the acquisition-date fair value of the contingent consideration.

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Answer 5

Chapter 2, Problem 4DYS

1.

To determine

Explain the reason why Company A acquire Company M.

2.

To determine

Explain the way in which the consideration transferred allocated between cash paid and the contingent consideration.

3.

To determine

Provide a schedule showing Company A’s allocations of the consideration transferred to the identifiable assets acquired and liabilities assumed with the remainder going to goodwill.

4.

To determine

Compute the maximum potential contingent payout (i.e., earn out) to the former owners of Company M. Although not explicitly stated in Company A’s fiscal 2015 10-K report (for the year ended March 31, 2015), Explain some possible factors that entered into the determination of the acquisition-date fair value of the contingent consideration.

Answer 6

Chapter 2, Problem 4DYS

1.

To determine

Explain the reason why Company A acquire Company M.

Answer 7

Chapter 2, Problem 4DYS

1.

To determine

Explain the reason why Company A acquire Company M.

Answer 8

2.

To determine

Explain the way in which the consideration transferred allocated between cash paid and the contingent consideration.

Answer 9

2.

To determine

Explain the way in which the consideration transferred allocated between cash paid and the contingent consideration.

Answer 10

3.

To determine

Provide a schedule showing Company A’s allocations of the consideration transferred to the identifiable assets acquired and liabilities assumed with the remainder going to goodwill.

Answer 11

3.

To determine

Provide a schedule showing Company A’s allocations of the consideration transferred to the identifiable assets acquired and liabilities assumed with the remainder going to goodwill.

Answer 12

4.

To determine

Compute the maximum potential contingent payout (i.e., earn out) to the former owners of Company M. Although not explicitly stated in Company A’s fiscal 2015 10-K report (for the year ended March 31, 2015), Explain some possible factors that entered into the determination of the acquisition-date fair value of the contingent consideration.

Answer 13

4.

To determine

Compute the maximum potential contingent payout (i.e., earn out) to the former owners of Company M. Although not explicitly stated in Company A’s fiscal 2015 10-K report (for the year ended March 31, 2015), Explain some possible factors that entered into the determination of the acquisition-date fair value of the contingent consideration.

Answer 14

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Answer 16

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Answer 17

Ch. 2 - Prob. 1Q Ch. 2 - Prob. 2Q Ch. 2 - Prob. 3Q Ch. 2 - Prob. 4Q Ch. 2 - Prob. 5Q Ch. 2 - Prob. 6Q Ch. 2 - Prob. 7Q Ch. 2 - Prob. 8Q Ch. 2 - Prob. 9Q Ch. 2 - Prob. 10Q

Explain the reason why Company A acquire Company M.

Explain the reason why Company A acquire Company M.

Explain the way in which the consideration transferred allocated between cash paid and the contingent consideration.

Provide a schedule showing Company A’s allocations of the consideration transferred to the identifiable assets acquired and liabilities assumed with the remainder going to goodwill.

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Chapter 2 Solutions