Purchase Method of Accounting All business combinations must be accounted for by applying the purchase method. This involves 3 key steps: a) Identifying an acquirer‚ b) Measuring the cost of the business combinations and c) Allocating the cost of the business combination to the identifiable assets and liabilities acquired. a) Identifying the Acquirer The acquirer should be identified for all business combinations‚ The acquirer is the entity which obtains controls over the other entity‚ There
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Sales Returns and Allowances $30‚000. BE9-13 Information related to plant assets‚ natural resources‚ and intangibles at the end of 2011 for Spain Company is as follows: buildings $1‚100‚000; accumulated depreciation—buildings $650‚000; goodwill $410‚000; coal mine $500‚000; accumulated depletion—coal mine $108‚000. Prepare a partial balance sheet of Spain Company for these items. Exercise Do It! 9 Match the statement with the term most directly associated with it E9-9
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goodwill. implied offering price. takeover premium. 5. If the value implied by the purchase price of an acquired company exceeds the fair values of identifiable net assets‚ the excess should be allocated to reduce any previously recorded goodwill and classify any remainder as an ordinary gain. allocated to reduce current and long-lived assets. allocated to reduce long-lived assets. accounted for as goodwill.
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WEEK 5 / ASSIGNMENT 1 Case Analysis: Nantucket Nectars PRO’s & CON’s Tom Scott and Tom First founded Nantucket Nectars in 1990 as a small side-business on Nantucket’s Straight Wharf. A peach fruit juice drink that Tom First discovered while visiting Spain inspired him and his partner to embark upon the journey of building their juice company. After only six years‚ the two entrepreneurs built a business that was generating $29‚493‚000 per year in revenue and $969‚000 in EBITDA. With remarkable
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Amortization of fair value over cost reduces the investment account 3. After allocating cost in excess of book value‚ which asset or liability would not be amortized over a useful life? A. Cost of goods sold B. Property‚ plant‚ & equipment C. Patents D. Goodwill E. Bonds payable 4. A company should always use the equity method to account for an investment if A. it has the ability to exercise significant influence over the operating policies of the investee. B. it owns 30% of another company’s stock. C
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Property‚ Plant and Equiptment * The property‚ plant and equipment portion of the Consolidated Balance Sheet of Sterling Homex shows a significant increase from 1970 to 1971. The Major contributor to its drastic increase is the “Buildings” account. From 1‚702‚924.00 it increased to 4‚822‚055.00‚ the movement was not explained in the notes though it may be attributed to the expansion of Homex in 1971. This is the time wherein they doubled their manufacturing facilities and created the U.S. Shelter
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prepaid accounts fall under this. Rule- Dr. the receiver Cr. the giver 2. Real Accounts- All assets‚ tangible & intangible come under this. Tangible assets like land & building‚ plant & machinery‚ furniture etc. and Intangible assets like goodwill‚ patents‚ trademarks etc. Rule- Dr. what comes in Cr. what goes out 3. Nominal Accounts- All expenses‚ losses‚ incomes and gains come under this. Rent‚ wages‚ salaries‚ interest‚ bad debts etc. are some examples. Rule- Dr. all expenses
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Financial reporting developments A comprehensive guide Impairment or Financial reporting disposal of longdevelopments lived assets Revised October 2011 To our clients and other friends ASC 360-10‚ Impairment and Disposal of Long-Lived Assets (ASC 360)‚ provides accounting guidance for impairments of assets that are held for use‚ held for sale and to be disposed of by other means. In one of its more challenging aspects‚ ASC 360-10 requires the use of fair value measurements for impairment
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• Consolidation journals are posted into the consolidation worksheet in “adjustment” columns as follows: Extract only Parent P Ltd. $’000 Subsidiary S Ltd. $’000 Adjustments DR Lecture 9 part b Consolidation: Wholly owned subsidiaries Prepared by Emma Holmes and Rick Newby Land Invt in S Ltd Receivables Cash 400 120 200 40 760 150 Share capital Retained earnings Creditors 500 160 100 760 100 20 50 170 Cons. Balances CR XX XX XX
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HIGH PERFORMANCE LEADERSHIP AUTOMOBILE INDUSTRY CHAPTER 1 INTRODUCTION TO AUTOMOBILE INDUSTRY One of the greatest creations of man‚ the "Automotive Car" or popularly known as "Car" is a result of man’s consistent efforts and perseverance. Over the years‚ the automobile industry has evolved as one of the main revenue generators‚ provider of employment and has progressed immensely. Automobile can be basically defined as a self-propelled vehicle used primarily on public roads but adaptable
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