Homework Answers
The answer is attached below
Summary : Jane is a buyer party. Hence she will choose method that shows lower valuation.
Under 3 methods as per below working 'Adjusted tangible assets' is showing lower valuation. Hence she will choose that
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Jane Winfield would like to buy Ted Garner's company. She has conducted a detailed financial analysis...
Jane Winfield would like to buy Ted Garner's company. She has conducted a detailed financial analysis...
Jane Winfield would like to buy Ted Garner's company. She has conducted a detailed financial analysis of Ted's firm and has determined the following: 1. Book value of the inventory: $250,000 2. Discount rate on future earnings: 24 percent 3. Book value of the plant and equipment: $150,000 4. Fair market value of the inventory: $400,000 5. Fair market value of other intangibles: $60,000 6. Number of shares of common stock: 100,000 7. Fair market value of the plant and...
ACC206: Financial Accounting MCQ 2.0 1. HL Ltd purchased a high speed industrial equipment at a...
ACC206: Financial Accounting MCQ 2.0 1. HL Ltd purchased a high speed industrial equipment at a cost of $420,000. Shipping costs totalled $15,000. Foundation work has to be done to house the equipment at HL Ltd’s premises and costs $8,000. An additional water line had to be run to the equipment at a cost of $3,000. Labour and testing costs totalled $6,000. Materials used up in testing cost $3,000. Under FRS 16 Property, Plant and Equipment , the capitalised cost...
ACC206: Financial Reporting MCQ please help 1. According to FRS 16 Property, Plant and Equipment, gains...
ACC206: Financial Reporting MCQ please help 1. According to FRS 16 Property, Plant and Equipment, gains when selling property, plant and equipment for cash: a. are the excess of the cash proceeds over the fair value of the assets. b. are the excess of the book value of the assets over the cash proceeds. c. are part of cash flows from operations. d. None of the listed options. 2. At the end of its fiscal year, an adverse economic condition...
ACC206: Financial Reporting MCQ Please help, urgent!! no need for explanations 1. An exclusive 15-year right...
ACC206: Financial Reporting MCQ Please help, urgent!! no need for explanations 1. An exclusive 15-year right to manufacture a product or use a process is a: a. patent b. copyright c. franchise d. trademark 2. At the end of its fiscal year, an adverse economic condition caused AA Ltd to perform an impairment test for one of its patents, for which it originally paid $66 million for. At the end of the fiscal year, it had accumulated amortisation of $16...
Alpha Company is considering the purchase of Beta Company. Alpha has collected the following data about...
Alpha Company is considering the purchase of Beta Company. Alpha has collected the following data about Beta: Total Identifiable assets Total liabilities Owners' equity Beta Company Book Values $631,600 288,700 $342,900 Estimated Market Values $735,800 328,300 Cumulative total net cash earnings for the past five years of $927,700 Includes extraordinary cash gains of $69,800 and nonrecurring cash losses of $44,300. Alpha Company expects a retum on Its Investment of 13%. Assume that Alpha prefers to use cash earnings rather than...
Goodwill Mills Company is considering purchasing EKC Company. EKC's balance sheet at December 31, 2019, is...
Goodwill Mills Company is considering purchasing EKC Company. EKC's balance sheet at December 31, 2019, is as follows: Cash $55,000 Current liabilities $50,000 Accounts receivable 68,000 Bonds payable 174,000 Inventory 140,000 Common stock 225,000 Property, plant, and equipment (net) 550,000 Retained earnings 364,000 $813,000 $813,000 At December 31, 2019, Mills discovered the following about EKC: No allowance for uncollectible accounts has been established. An allowance of $6,000 is considered appropriate. The LIFO inventory method has been used. The FIFO inventory...
Exercise 1-2 Alpha Company is considering the purchase of Beta Company. Alpha has collected the following...
Exercise 1-2 Alpha Company is considering the purchase of Beta Company. Alpha has collected the following data about Beta: Beta Company Estimated Book Values Market Values Total identifiable assets $541,800 $734,700 Total liabilities 317,800 309,500 Owners' equity $224,000 Cumulative total net cash earnings for the past five years of $906,800 includes extraordinary cash gains of $64,800 and nonrecurring cash losses of $46,000. Alpha Company expects a return on its investment of 13%. Assume that Alpha prefers to use cash earnings...
An increasing inventory turnover ratio indicates that a company: has reduced the time it takes to...
An increasing inventory turnover ratio indicates that a company: has reduced the time it takes to purchase and sell inventory. is having trouble selling its inventory. may be holding too much inventory. is selling inventory at a higher than normal profit. For the year ended December 31, ABC Company cost of goods sold was $48,000. Inventory at the beginning of the year was $6,000. Ending inventory was $10,000. Compute inventory turnover for the year. 8.0 4.8 8.4 6.0 Firms are...
Williams Company is a manufacturer of auto parts having the following financial statements for 2018-2019. Balance...
Williams Company is a manufacturer of auto parts having the following financial statements for 2018-2019. Balance Sheet December 31 2019 Cash $ 264,800 Accounts receivable 154,800 Inventory 389, eee Total current assets $ 827,899 Long-lived assets 1,680, eee Total assets $2,487,eee Current liabilities 248, eee Long-term debt 990.ea3 Shareholders' equity 1,339, eee Total debt and equity $2,487,000 2018 $ 139.ee 229,000 179,800 $ 547,899 1,540,888 $2,887,899 215,800 8 40. 1,832, 800 $2,887,899 Income Statement For the years ended December 31...
Jane Winfield would like to buy Ted Garner's company. She has conducted a detailed financial analysis of Ted's firm and has determined the following: 1. Book value of the inventory: $250,000 2. Discount rate on future earnings: 24 percent 3. Book value of the plant and equipment: $150,000 4. Fair market value of the inventory: $400,000 5. Fair market value of other intangibles: $60,000 6. Number of shares of common stock: 100,000 7. Fair market value of the plant and...
Alpha Company is considering the purchase of Beta Company. Alpha has collected the following data about Beta: Total Identifiable assets Total liabilities Owners' equity Beta Company Book Values $631,600 288,700 $342,900 Estimated Market Values $735,800 328,300 Cumulative total net cash earnings for the past five years of $927,700 Includes extraordinary cash gains of $69,800 and nonrecurring cash losses of $44,300. Alpha Company expects a retum on Its Investment of 13%. Assume that Alpha prefers to use cash earnings rather than...
Exercise 1-2 Alpha Company is considering the purchase of Beta Company. Alpha has collected the following data about Beta: Beta Company Estimated Book Values Market Values Total identifiable assets $541,800 $734,700 Total liabilities 317,800 309,500 Owners' equity $224,000 Cumulative total net cash earnings for the past five years of $906,800 includes extraordinary cash gains of $64,800 and nonrecurring cash losses of $46,000. Alpha Company expects a return on its investment of 13%. Assume that Alpha prefers to use cash earnings...
An increasing inventory turnover ratio indicates that a company: has reduced the time it takes to purchase and sell inventory. is having trouble selling its inventory. may be holding too much inventory. is selling inventory at a higher than normal profit. For the year ended December 31, ABC Company cost of goods sold was $48,000. Inventory at the beginning of the year was $6,000. Ending inventory was $10,000. Compute inventory turnover for the year. 8.0 4.8 8.4 6.0 Firms are...
Williams Company is a manufacturer of auto parts having the following financial statements for 2018-2019. Balance Sheet December 31 2019 Cash $ 264,800 Accounts receivable 154,800 Inventory 389, eee Total current assets $ 827,899 Long-lived assets 1,680, eee Total assets $2,487,eee Current liabilities 248, eee Long-term debt 990.ea3 Shareholders' equity 1,339, eee Total debt and equity $2,487,000 2018 $ 139.ee 229,000 179,800 $ 547,899 1,540,888 $2,887,899 215,800 8 40. 1,832, 800 $2,887,899 Income Statement For the years ended December 31...
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