Answer:
Explanation:
From the information povided:
(a) To compute the amount of goodwill paid by Chicago Corporation
Particulars Amount ($)
Accounts Receivable 100000
Inventory 170000
Plant & Equipment 400000
Land 90000
Customer List 4000
Trade Names <u> 16000</u>
NET ASSETS (A) <u>780000</u>
<u />
Current liabilities 76000
Non-current liabilities <u>160000 </u>
NET LIABILITIES (B) <u> 236000</u>
∴
PURCHASE CONSIDERATION (A -B) 544000
<u>Less:</u> Cash Paid <u> 580000</u>
GODWILL <u> 36000 </u>
<u />
b)
In the books of Chicago Corporation, the Journal Entry to record the purchase of Naperville Company.
Account Name Dr. Cr.
Accounts Receivable A/C 100000
Inventory A/C 170000
Plant Equipment A/C 400000
Land A/C 90000
Customer List A/C 4000
Trade Names A/C 16000
Goodwill A/C 36000
Current liabilities A/C 76000
Non-Current Liabilities A/C 160000
Cash A/C 580000
c)
The minimum required amount of goodwill that Chicago can amortize by the end of 2020 is $3600.This is because the amortization can take place for a period of 10 years.
<u />
Answer:
Answer is 1,200,000
Explanation:
return on sales after taxes = 6%
effective income tax rate = 40%, contribution margin = 30%.
Robin has fixed costs = $240,000,
We are to find the amount of sales required to earn the desired return using the information above.
Profit = Contribution - Fixed Cost
Assuming sales = K
6/(100-40)K = (30/100)K -240,000
0.1K =0.3K -240,000
0.2K =240,000
K = 240,000/0.2
so K =1,200,000.
The correct answer that would best complete the given statement above would be option A. SEQUENCE refers <span>to the order of things, such as performing the goal-setting processes. Goal setting is a process in which you will be thinking of possible ideas that will help and understand how to achieve your goals. Hope this answer helps.</span>
Answer:
Spot USD/GBP rate = 1.5711
(a) 1 year USD/GBP forward rate:
= [Spot rate × (1 + Domestic currency interest rate)] ÷ (1 + foreign currency interest rate)
= [1.5711 × (1+0.19%)] ÷ (1 + 0.39%)
= 1.56797, which means the USD will be at a forward premium
b) The observed 1 year forward rate is 1.60 which differs from the ideal forward rate.
This means an arbitrage opportunity exists here.
c) I would sell GBP forward for 1 year @ 1.60.
This means that I will receive USD 1.60 for every 1 GBP I sell instead of 1.56797 that is the ideal deal.
This is how I would take advantage of the arbitrage opportunity.
