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Advocard [28]
2 years ago
5

Elizabeth Pie Company has been in business for 50 years and has developed a large group of loyal restaurant customers. Giant Bak

ery Inc. has made an offer to buy Elizabeth Pie Company for $5,100,000. The book value of Elizabeth Pie’s recorded assets and liabilities on the date of the offer is $4,350,000 with a fair value of $4,600,000. Elizabeth Pie also (1) holds a patent for a pie crust fluting machine that the company invented (the patent with a fair value of $305,000 was never recorded by Elizabeth Pie because it was developed internally) and (2) estimates goodwill from loyal customers to be $306,000 (also never recorded by the company).
If Elizabeth Pie Company management accepts Giant Bakery's offer of $5,100,000. Compute the amount of goodwill that Giant Bakery should record on the date of the purchase.
Business
1 answer:
Zolol [24]2 years ago
5 0

Answer:

goodwill = $195,000

Explanation:

goodwill = offered purchase price - fair value of assets - fair value of patents = $5,100,000 - $4,600,000 - $305,000 = $195,000

Customer loyalty is part of a company's goodwill, so it will not be included in this calculation. Goodwill is the difference between the acquisition price of a company and the fair value of its assets.

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Elise is the marketing manager in a travel company. She is planning to place an advertisement in local newspapers to promote her
Scorpion4ik [409]

Answer:

The answer is C. link the advertisements to online promotions.

Explanation:

Now lets take a look at it one by one and see why C is the answer.

As in option A, she can ask a few friends whether they've seen the ad or not, but their replies would not accurately show the success of the promotion strategy.

In Option B,  it take some time to measure the results and the quarterly sales numbers can be influenced by many factors and may not reflect the impact of this specific promotional campaign.

Option D is irrelevant, Elise's company sales and the sales of the newspapers are not related. So we can not take this as an answer.

Option C however is very applicable. If you link the advertisements to online promotions, when those who read the news paper comes to check the online promotion, we can see how well has the ad performed based on the number of online enrollments of the readers.

6 0
2 years ago
You have received a share of preferred stock that pays an annual dividend of $10. Similar preferred stock issues are yielding 22
Blizzard [7]

Answer:

The value of this share of preferred stock is $44.44

Explanation:

Dividend = $10

Yield= 22.5% = 0.225

Value of share of preferred stock = Dividend / Preferred stock yield

=$10/0.2250

=$44.44444

=$44.44

6 0
2 years ago
Identify a difference between the crisis stage and the dissolution stage of organizational decline. Select one: a. In the crisis
pentagon [3]

Answer: c. Decline is reversible at the crisis stage, whereas it is irreversible at the dissolution stage.

Explanation: Crisis Stage; at this stage decline is still reversible if the

organisation reorganizes it ways of operations or conducting business. What they can do at this point is to carryout cutbacks and layoffs which would help reduce it's financial burden and create additional capital to run the business. At the dissolution stage nothing can be done anymore to salvage the company as it would have run into bankruptcy and would need to fold up.

7 0
2 years ago
Read 2 more answers
Java Joe operates a chain of coffee shops. The company pays rent of $20,000 per year for each shop. Supplies (napkins, bags and
lukranit [14]

Answer:

The correct answer is Variable Cost.

Explanation:

According to the scenario, the rent and manager salary is fixed, so, it is under fixed cost.

Whereas, Cost of supplies ( i.e. napkins, bags and condiments) are variable according to the number of customer. As the number of customer increases, cost of supply also increases and as the number of customer decreases, cost of supply also decreases.

This type of cost is known as Variable cost,

Hence, The cost of supply is Variable cost in the given scenario.

7 0
2 years ago
What media format reaches more people than television during the hours of the workday?
nignag [31]

Radio.

Newspapers, only a select people buy them, skywriting only reaches a small amount of people, and many people do not read magazines during workdays. However, radio is effective because most people most likely listen to it before work.

8 0
2 years ago
Read 2 more answers
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