User Account

All Pages

Compute the value of IBM investment in ABC

Assignment Help Financial Accounting
Reference no: EM132978083

Question - IBM acquires 80% of ABC, Inc. for $40 million on January 1, 2013. At the time of acquisition, ABC has total net assets with a fair value of $25 million. For the years ending December 31, 2013, and December 31, 2014, ABC, Inc. reports net income (loss) and pays dividends as shown here:

Net Income (loss) $2,000,000

Dividends Paid $1,000,000 (2014)

Net Income (Loss) $(600,000)

Dividends Paid $800,000 (2013)

The excess of the acquisition price over the fair value of net assets acquired is assigned to goodwill. Since goodwill has an indefinite life, it is not amortized.

Compute the value of IBM's investment in ABC, Inc. as of December 31, 2014, under the equity method.

Reference no: EM132978083

Questions Cloud

Why is resource allocation so important : Why is resource allocation so important? How are strategy, structure and resource are related?
What is the equivalent annual annuity of this project : The project will generate cash flows of $206 in Years 1-3 and cash flows of $220 in Years 4-6. What is the equivalent annual annuity (EAA) of this project
What will be Jack monthly payment under the buy option : Alice wants to live in India for 10 yrs. She considers buying a house and starts comparing her options. What will be Jack monthly payment under the buy option
Prepare the journal entries that Morgan should make : Prepare the journal entries that Morgan should make to record the events described assuming that the forward contract is designated as a cash flow hedge
Compute the value of IBM investment in ABC : Compute the value of IBM's investment in ABC, Inc. as of December 31, 2014, under the equity method
What do you think you can do to help close the gap : What do you think you can do to help close the gap even more when you enter the workforce
What total amount should be recognized as impairment loss : Because of an inflationary economy, the trademark is expected to generate cash flows of P160,000 per year. What total amount be recognized as impairment loss
Prepare the NCI notional journal entry : During March 2020 Sub Ltd had made sales to Investor Ltd of $9 000. The inventory sold had cost Sub Ltd $6 500. Prepare the NCI notional journal entry
Prepare current assets section of diesel additives company : Prepare the "Current assets" section of Diesel Additives Company's balance sheet at August 31. Partial balance sheet data for Diesel Additives Company at August

Reviews

Write a Review

Financial Accounting Questions & Answers

  How much will be in the account at the end of years

If the account earns 10.7% (assume annual compounding), how much will be in the account at the end of 30 years

  What would be value of the same bond

What would be value of this same bond if investors are instead willing to accept an 8.25% rate, and is it selling a premium or discount?

  The conservatism constraint

The conservatism constraint: Requires that when more than one equally likely estimate of amounts is expected to be received or paid in the future, then the less optimistic amount should be used.

  Entry to record estimated uncollectible accounts receivables

Allowance for Doubtful Accounts has a credit balance of $460 at the end of the year (before adjustment), and bad debt expense is estimated at 2% of net sales. If net sales are $666,297, the amount of the adjusting entry to record the estimated uncoll..

  Determine what annual ordering cost of post card inventory

Post Card Depot plans on ordering post card 6 times over the next year. Post Card Depot receives. What is the annual ordering cost of the post card inventory?

  What is zimmer biomet holdings principle line of business

What is the Zimmer Biomet Holdings' principle line of business? Who (i.e., specific companies) are Zimmer Biomet Holdings' major competitors?

  What amount must kook corporation include income statement

The facility was completed in early 2020. What amount must Kook Corporation include in its 2020 income statement as income from the government?

  Calculate the expected spot rate in six months

Calculate the expected spot rate in 6 months, assuming the Interest Rate Parity holds between the two countries. (Round off calculations to four decimals.)

  Show the cost of increased government health services

Suppose federal, state, and local governments in the United States were to engage in a massive campaign to deal with AIDS, drug abuse, and other health- related problems. The increase in government medical spending would require a massive tax increas..

  Prepare the adjusting entries as of March

Prepare the adjusting entries as of March 31, 2020 and the computations in good form. During the quarter, SRS collected in advance Php 50,000 from clients

  Estimate the cash flows for the program

Estimate the cash flows for the program if Kelce uses Firm Green and if Kelce uses Firm Blue and then calculate the following for both

  How many transfers per year will be required

What would the total cost be if the company maintained an average cash balance of $0 (it deposits funds daily to meet cash requirements)?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd