a.
Book value:
Book value of the asset is found out after deducting
The fair value of the asset:
The fair value of the asset is the amount at which two parties may enter into an agreement with open hand.
Cash flow:
Cash flow is the receipt or payment by the organization. It may be related to the current period or any other period. It shows the cash position of the organization.
Cash flow from operating activities:
Cash flow from the operating activities shows the receipt and payment regarding the business activity only.
Cash flow from investing activities:
Cash flow from the investing activities shows the receipt and payment regarding the investment activity only.
Cash flow from financing activities:
Cash flow from the financing activities shows the receipt and payment regarding the financing activity only.
Cash flow statement:
Cash flow statement is a statement that reports the
The effect of given transaction on the cash flow statement of the consolidated firm in the period of the purchase if Company P pays $640,000 cash to purchase the stock.
Cash flow from investing activities:
Cash flow from the investing activities shows the receipt and payment regarding the investment activity only.
To explain:
The effect of given transaction on the cash flow statement of the consolidated firm in the period of the purchase if Company P pays $400,000 cash and signs a 5-year note for $240,000.
c.
Cash flow from investing activities:
Cash flow from the investing activities shows the receipt and payment regarding the investment activity only.
The effect of given transaction on the cash flow statement of the consolidated firm in the period of the purchase if Company P exchanges only common stock with the shareholders of Company S.
Want to see the full answer?
Check out a sample textbook solution
Chapter 6 Solutions
ADVANCED ACCOUNTING
- Hello tutor provide answer this financial accounting questionarrow_forwardMaxwell Corp., which began business at the start of the current year, had the following data: The company planned and actually produced 50,000 units. It sold 47,000 units at a price of $18 per unit. The production costs included a variable cost of $6 per unit and total fixed costs of $300,000. Selling and administrative costs consisted of a variable cost of $2 per unit and fixed costs of $40,000. What is the gross margin that the company would disclose on an absorption-costing income statement?arrow_forwardOn August 1, 2019, Rockwell Logistics purchased a truck for $75,000. The truck has a useful life of 6 years and a residual value of $7,500. The truck is depreciated using the straight- line method. What is the depreciation expense for 2019?arrow_forward
- General Accountingarrow_forwardLakeshore Retailers estimates bad debts as 2% of net sales but is switching to the aging method, which indicates 6% of overdue accounts are uncollectible. If total accounts receivable is $150,000, with $40,000 overdue, compute bad debt under both methods.arrow_forwardAnswer the following requirements on these accounting questionarrow_forward
- Fletcher Company constructs custom outdoor decks. Fletcher budgets that they will build 18 decks during the month of May at a price of $15,750 per deck. The actual number of decks built by Fletcher during May was 22 decks at a price of $16,200 per deck. What is the Sales Volume Variance for May?arrow_forwardOn September 1, your business had a beginning cash balance of $500. Your sales for August were $800, and your sales for September totaled $1,000. During September, you paid $200 in cash expenses and paid off $350 of accounts payable. Your accounts receivable collection period is 30 days. What is your firm's beginning cash balance on October 1?arrow_forwardFranklin Company had a beginning raw materials inventory of $9,500. During the period, the company purchased $52,000 of raw materials on account. If the ending balance in raw materials was $7,000, what is the amount of raw materials transferred to work in process inventory? I. $54,500 II. $50,500 III. $44,000 IV. $52,000arrow_forward
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education