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Arte-miy333 [17]
2 years ago
13

On September 1, 2020, Flounder Corporation acquired Shamrock Enterprises for a cash payment of $690,000. At the time of purchase

, Shamrock’s balance sheet showed assets of $650,000, liabilities of $190,000, and owners’ equity of $460,000. The fair value of Shamrock’s assets is estimated to be $770,000.Compute the amount of goodwill acquired by Flounder.
Business
1 answer:
Rama09 [41]2 years ago
3 0

Answer:

$110,000

Explanation:

Net value of assets = Fair value of assets - Fair value of liabilities

                                 =  $770,000 - $190,000

                                 = $580,000

Fair value of goodwill:

= Purchase price - Net value of assets

= $690,000 - $580,000

= $110,000

Therefore, the amount of goodwill acquired by Flounder is $110,000.

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2 years ago
A trader creates a long butterfly spread from options with strike prices $60, $65, and $70 by trading a total of 400 options. Th
malfutka [58]

Answer:

$400

Explanation:

From the question, there is a butterfly spread when a trader buys 100 options with strike prices $60 and $70 and sells 200 options with strike price $65.

The maximum gain is the point where both the stock price and the middle strike price are equal, i.e. equal to $65. At that point, the options payoffs are respectively $500, 0, and 0. By implication, the total payoff is $500.

The set up cost of the butterfly spread can be calculated as follows:

Setup cost = ($11×100) + ($18×100) – ($14×200)

                  = 1,100 + 1,800 – 2,800

Setup cost = $100

Net gain = Options payoffs – Setup cost = $500 - $100 = $400

Therefore, the maximum net gain (after the cost of the options is taken into account) is $400.

3 0
2 years ago
What are potential sources of error for bmi and w/h ratio?
VMariaS [17]
<span>Potential sources of error for bmi come from measurement errors. BMI is calculated by your height and weight. If the height is calculated by seeing how tall you are and measured by inches. If you are not standing straight and slouch you height measurement is not accurate. Weight is measured on a scale in pounds. One must remove clothes to get an accurate weight. If any of these measurements are off, the bmi will not correct.</span>
6 0
2 years ago
Read 2 more answers
A manager who encourages risk taking and creativity would most likely be in a(n) _______ organizational culture.
Vinil7 [7]

Answer:

Adhocracy Culture

Explanation:

An adhocracy culture is based on energy and creativity. Employees are encouraged to take risks, and leaders are seen as innovators or entrepreneurs. The organization is held together by experimentation, with an emphasis on individual ingenuity and freedom. The core values are based on change and agility.

5 0
2 years ago
On April 1, Robert LLC purchased two units of inventory, A and B. The cost of unit A was $650, and the cost of unit B was $625.
attashe74 [19]

Answer:

Debit : Cost of Goods Sold : $75

Credit : Inventory : $75

Explanation:

The lower-of-cost-or-market method is based on the conservative accounting theory. This is where company accounts are prepared with caution and verification. All losses are recorded as they are discovered whereas gains are recorded only after realised. In this case, there is a gain in Inventory A, hence it won’t be recorded as of yet. However, the value of Inventory B has reduced and this requires to be recorded.

The cost of Inventory B should be reduced to the lower net realizable value, hence it would be reduced by the difference : $625 - $550 = $75

Debit : Cost of Goods Sold : $75

Credit : Inventory : $75

3 0
2 years ago
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