GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
17th Edition
ISBN: 9781260218831
Author: Libby
Publisher: MCG CUSTOM
expand_more
expand_more
format_list_bulleted
Question
Chapter A, Problem 11ME
To determine
Explain the reason for large
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
HOW MUCH IS THE GOODWILL?
Accounting solve this question
Topic: Intangible Assets (Goodwill)
England Company assembled the following data relative to a certain entity in determining the amount to be paid for net assets and goodwill:
Assets at fair value before goodwill 2,600,000
Liabilities 900,000
Shareholders' Equity 1,700,000
Net Earnings after elimination of unusual or infrequent items:
2017 200,000
2018 230,000
2019 300,000
2020 250,000
2021 270,000
Required:
Calculate the amount of goodwill under the following:
1. Average earnings are capitalized at 10%.
2. A return of 8% is considered normal on net assets at fair value. Excess earnings are capitalized at 15%.
3. A return of 10% is considered normal on net assets at fair value. Goodwill is measured at 5 years excess earnings.
4. A return of 10% is considered…
Chapter A Solutions
GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
Ch. A - Prob. 1QCh. A - Explain the difference in accounting methods used...Ch. A - Explain how bonds held to maturity are reported on...Ch. A - Explain the application of the cost principle to...Ch. A - Under the fair value method, when and how does the...Ch. A - Under the equity method, why does the investor...Ch. A - Prob. 7QCh. A - Prob. 8QCh. A - Prob. 9QCh. A - Company X owns 40 percent of Company Y and...
Ch. A - Prob. 2MCQCh. A - Dividends received from stock that is reported as...Ch. A - Prob. 4MCQCh. A - Prob. 5MCQCh. A - When using the equity method of accounting, when...Ch. A - Prob. 7MCQCh. A - Prob. 8MCQCh. A - Which of the following is true regarding the...Ch. A - Prob. 10MCQCh. A - Matching Measurement and Reporting Methods Match...Ch. A - Prob. 2MECh. A - Prob. 3MECh. A - Prob. 4MECh. A - Prob. 5MECh. A - Prob. 6MECh. A - Prob. 7MECh. A - Prob. 8MECh. A - Prob. 9MECh. A - Prob. 10MECh. A - Prob. 11MECh. A - Prob. 1ECh. A - Prob. 2ECh. A - Recording Transactions in the Available-for-Sale...Ch. A - Prob. 4ECh. A - Prob. 5ECh. A - Reporting Gains and Losses in the Trading...Ch. A - Prob. 7ECh. A - Prob. 8ECh. A - Prob. 9ECh. A - Prob. 10ECh. A - Prob. 11ECh. A - Prob. 1PCh. A - Prob. 2PCh. A - Prob. 3PCh. A - Prob. 4PCh. A - Prob. 5PCh. A - Comparing Methods to Account for Various Levels of...Ch. A - Prob. 7PCh. A - Recording Investments for Significant Influence LO...Ch. A - Prob. 9PCh. A - Prob. 10PCh. A - Prob. 11PCh. A - Prob. 1APCh. A - Prob. 2APCh. A - Reporting Passive Investments During January 2017,...Ch. A - Prob. 4APCh. A - Prob. 5APCh. A - Prob. 6APCh. A - Prob. 1CONCh. A - Finding Financial Information Refer to the...Ch. A - Prob. 2CPCh. A - Prob. 3CPCh. A - Prob. 4CPCh. A - Prob. 5CPCh. A - Prob. 6CP
Knowledge Booster
Similar questions
- Hello tutor Provide Correct Answerarrow_forwardIf the company's assets in TL: cash 100.000, accounts receivable 50.000, inventory 150.000, and building 200.000 (market value 300.000) and the liabilities 300.000. If the price paid to acquire company 400.000 TL, how much is the goodwill under market value approach? Select one: a. 100.000 b. 300.000 c. 200.000 d. 150.000arrow_forwardPW 20191007 AC 251 FINANCIAL MANAGEMENT 3. Last Year Ratter Robotics had $5 million in Operating income (EBIT). The company has net depreciation expense of $1 million and interest expense of S1million; its corporate tax rate was 40 percent. The company has $14million in current assets and $4 million in non-interest-bearing current liabilities; it has $15 million in net plant and equipment. It estimates that it has an after-tax cost of capital of 10 percent. Assume Ratner only non-cash item was depreciation. a. What was the company's net income for the year? b. What was the company's net cash flow?arrow_forward
- GOODWILL - Financial Reporting Considerations Cabot Corporation's statement of financial position at 31 December 2013 includes an asset entitled goodwill in the amount of $900,000, net of accumulated amortization. (a) Briefly explain what is meant by the term goodwill. (b) Under what circumstances is goodwill recorded in the accounting records? Include in your Answer a specific situation in which Cabot would have recorded the goodwill mentioned above.arrow_forwardThe company has net sales revenue of $6.8 million during 2021. The company's records also included the following information: 12/31/20 $3.9 million $ 2.1 million $ 1.9 million $2.0 million Assets Property, plant and equipment Licensing agreements Goodwill Investments What is the company's fixed asset turnover ratio for 2021? Mc Multiple Choice O 1.00 17.00 1.42 2.47 12/31/21 $ 5.7 million $2.0 million $ 1.9 million $ 2.1 millionarrow_forwardPlease don't provide solutions in an image format thanksarrow_forward
- A6arrow_forwardG, Total Asset Turnover Sales/ Total Assets g. Asset Turnoverarrow_forwardCurrent Attempt in Progress Staples, Inc. is one of the largest suppliers of office products in the United States. Suppose it had net income of $964.1 million and sales of $23,333.4 million in 2022. Its total assets were $13,300.5 million at the beginning of the year and $14,150.5 million at the end of the year. What is Staples, Inc.'s (a) asset turnover and (b) profit margin? (Round asset turnover to 2 decimal places, eg. 1.25 and profit margin to 1 decimal place, e.g. 2.5%.) (a) Asset turnover (b) Profit margin times %arrow_forward
- Topic: Intangible Assets (Goodwill) Sarrah Company is interested in computing the goodwill to be recognized in the purchase of ABC Company in January 2022. The following information was taken from the records of ABC Company: Net Income Net Assets 2017 360,000 1,600,000 2018 388,000 1,800,000 2019 288,000 1,900,000 2020 380,000 2,000,000 2021 394,000 2,100,000 1,810,000 9,400,000 Goodwill is measured by capitalizing excess earnings at 40% with normal return on average net assets at 10%. What amount should be recorded as acquisition cost of ABC…arrow_forwardMinMin Co. assembled the following data relative to a certain entity in determining the amount to be paid for net assets and goodwill: Identifiable assets at fair value P 2,600,000 Liabilities at fair value 900,000 Net assets at fair value 1,700,000 Earnings over the previous 5 years were as follows: 150,000 180,000 250,000 200,000 220,000 2017 2018 2019 2020 2021 Additional information • Key management bonus over the previous 5 years amounted to P200,000 • Loss on sale of equipment amount to 50,000 • A return of 10% is considered normal on net assets at fair value. Calculate the amount of goodwill under the following: 1. Average earnings capitalized at 10% 2. How much is the correct cost of the trademark? 4)arrow_forwardNeed Help with this Questionarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Auditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College