User Account

All Pages

Discuss how much goodwill will result from this transaction

Assignment Help Accounting Basics
Reference no: EM131746473

Goodwill arises when one firm acquires the net assets of another firm and pays more for those net assets than their current fair value. Suppose that Target Co. had operating income of $69,700 and net assets with a fair value of $177,000. Takeover Co. pays $330,000 for Target Co.'s net assets and business activities.

Required:

a. How much goodwill will result from this transaction?

b. Calculate the ROI for Target Co. based on its present operating income and the fair value of its net assets. (Round your percentage answer to 2 decimal places.)

c. Calculate the ROI that Takeover Co. will earn if the operating income of the acquired net assets continues to be $69,700. (Round your percentage answer to 2 decimal places.)

Reference no: EM131746473

Questions Cloud

What is reeds position in the columbus market : What is Reed's position in the Columbus market? How does a supermarket make money?How serious is the threat posed by dollar stores and Aldi?
What is the FY accounts receivable turnover ratio : What is the FY 2016 accounts receivable turnover ratio? Enter the answer as a number rounded to one decimal place followed by a space and the word times
Discuss straight-line depreciation expense : During the first month of its current fiscal year, Green Co. incurred repair costs of $25,000 on a machine that had 3 years of remaining depreciable life
Examine the rise and interaction of two historical forces : Examine the rise and interaction of two historical forces and give two examples of how they shaped human societies in the 20th century.
Discuss how much goodwill will result from this transaction : Calculate the ROI for Target Co. based on its present operating income and the fair value of its net assets
Discuss the capital projects and debt service funds : Prepare a Statement of Revenues, Expenditures and Changes in Fund Balance for the Capital Projects and Debt Service Funds
Discuss about the benefits to an elevator pitch : Rank the following factors in order of importance when developing an elevator speech, and provide a rationale for your response.
Determine two goals of the civil rights movement : Determine two goals of the Civil Rights Movement, and explore the fundamental reasons these goals had limited effect during and after the 1960s.
Discuss manager changed to a lowerminus-price supplier : The purchasing manager ordered larger quantities than the quantities budgeted, and therefore obtained quantity discounts

Reviews

Write a Review

Accounting Basics Questions & Answers

  Prepare the journal entry to recognize the probability

Callaway Corp. has a deferred tax asset account with a balance of $150,000 at the end of 2014 due to a single cumulative temporary difference of $375,000.

  Shuttle eze operates airport shuttle vans in twelve

Shuttle Eze operates airport shuttle vans in twelve large cities Describe the advantages and disadvantages of using a centralized database for Shuttle-Eze.

  Assume that adria lopez expands success systems

Assume that Adria Lopez expands Success Systems accounting system to include special journals.

  In what amount should the institute recognize revenue

A foundation pledges to donate $1 million to an art institute one year in the future. When, and in what amount, should the institute recognize revenue?

  Explain the difference in the accounting treatment

Explain the difference in the accounting treatment of the cost of developed technology and the cost of in-process R&D in an acquisition.

  Why ending inventory figure should be extremely accurate

As the accounting manager, write a memo to Mr. Talbott, explaining why the ending inventory figure should be extremely accurate, with as little slack as possible.

  What percentage of the contribution margin is profit

What percentage of the contribution margin is profit on units sold in excess of the breakeven point?

  Prepared on a calendar-year basis

Nash's financial statements are prepared on a calendar-year basis

  Supply club inc sells a variety of paper products office

supply club inc. sells a variety of paper products office supplies and other products used by businesses and individual

  Establishment of 1231 assets

Why did Congress establish favorable treatment for 1231 assets?

  Differences between accruals and payables

Discuss the fundamental differences between accruals and payables. Are accruals and/or payables subject to adjustments

  Distinguishing between operating and non operating items

What is the basis for distinguishing between operating and non-operating items?

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