Which of the following statements is consistent with the ideas that W. Edwards Deming promoted regarding quality management? a.
1 answer:
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Answer:
1. Discount
2. $449,298.47
3. $369,298.47 gain
4. land reduces by $80,000, investment increases by $449,298.47, reserves increases by $369,298.47
Explanation:
Question 1
Using the formula below
where
I = interest rate, which is 6% of 500,000 = 30,000
F = Face value, 500,000
r = borrowing cost = 12%
Therefore, the price of the note at the time it was used for payment was
= $449,298.47.
As the price is lower than the face value of the note, the note was issued at a discount.
Question 2
The fair market value of the note is $449,298.47, the compute price in question 1.
Question 3
The gain/loss on the sale of the land
= sale price - purchase price
= $449,298.47 - 80,000
= $369,298.47.
Question 4
The transaction would affect Crabb & Co's balance sheet as follows.
<em>Asset side:</em>
land reduces by $80,000
investment increases by $449,298.47
<em>Equity & liabilities side:</em>
reserves increases by $369,298.47
Answer:
See the attached file below.
Explanation:
There's not much difference between IFRS and U.S. GAAP when it comes to business acquisition.
In accordance with IFRS, FB Corp. would do the following procedure:
(1) record the acquired assets and liabilities at fair value
(2) expense any acquisition related costs such as legal fees
(3) ignore post acquisition costs when determining the values at acquisition
(4) calculate goodwill as the difference between the net assets and the acquisition price less legal fees.
