Acquire gold company which had an operating income

Assignment Help Financial Accounting

Reference no: EM131251002

Black company recently paid $950,000 to acquire Gold company which had an operating income of $240,000 and net assets of $780,000.

Which of the following statements is incorrect?

A. Black has paid $170,000 in goodwill to acquire Gold.

B. Black's purchase of Gold could be due to expected profits in Gold that Black wishes to take part in.

C. The ROI of 31% represents Gold's current operating status.

D. If the operating income of Gold is expected to rise to $280,000 the ROI on Black's investment will be 25%.

Reference no: EM131251002

Questions Cloud

Admission of tovar to the partnership : Gamma co capital balances are Barr 30,000, croy 25,000 and embank 22,000 the partners share income equally .Tovar is admitted to the firm by purchasing one half of eubanks for 13,000, journalize the admission of tovar to the partnership

Gross margin and operating expenses-respectively : A company has net sales of $829,000 and cost of goods sold of $549,500. Its net income is $99,000. The company's gross margin and operating expenses, respectively, are:

Regard to the valuation of noncurrent assets : Which of the following statements is incorrect when comparing GAAP to IFRS in regard to the valuation of noncurrent assets?

Deductions for interest on home mortgage and property taxes : DISCUSS the probable justification for each of the following aspects of the tax law...I NEED at least one sentence explaining your answer. A tax credit is allowed for amounts spent to furnish care for minor children while the parent works. Deductions..

Acquire gold company which had an operating income : Black company recently paid $950,000 to acquire Gold company which had an operating income of $240,000 and net assets of $780,000.

Inclusion of possible liability on the books of hartman : Hartman Industries just finished their most recent board meeting and during the meeting a discussion evolved concerning a pending lawsuit against Hartman. The initial filing of the suit was thirty days ago and the local newspapers and television stat..

Holds the benefits of definite dividend calculated : Over the recent holiday you met an individual named Jeff who was raving about the great price they paid for shares of stock in BlueFin Industries. According to Jeff the stock carries a bit of risk in that it can be redeemed by the issuing company, bu..

Determine whether or not the board can declare dividend : Beck Clothiers, Inc. has been a premier contractor for heavy duty work clothes for over forty years. Recently, due to the economic slowdown affecting the construction and other heavy labor industries, Beck's activity indicates that they may incur a l..

Compute the costs per equivalent unit for the month : Builder Products, Inc., manufactures a caulking compound that goes through three processing stages prior to completion. Information on work in the first department, Cooking, is given below for May: Production data: Pounds in process, May 1; materials..

User Account

All Pages