Find the amount of goodwill that acme will record

Assignment Help Financial Accounting
Reference no: EM133029528

Question - Martin & Sons has $4.2 million in net working capital. The firm has total assets with a book value of $48.6 million and a market value of $53.4 million. They currently carry no debt on their balance sheet, sales are expected to be $45 million next year, and their tax rate is similar to ACME at 40%. Through a mixture of synergistic savings and increased market share this acquisition should add $2 million in net profit per year for the next 10 years. Acme Iron is considering buying the company for $60 million in cash. The acquisition will be recorded using the purchase accounting method.

Find the amount of goodwill that Acme will record on its balance sheet as a result of this acquisition?

How do you recommend the firm finance this transaction?

Is there a danger that ACME could damage their finances to the point that bankruptcy is a potential?

Reference no: EM133029528

Questions Cloud

What impact can have on the social environment : One question: as a health care administrator why should be interested in the relationship between the environment, primarily the physical environment and human
Windows azure capabilities for virtual machines : Explain Windows Azure capabilities for virtual machines and managing a hybrid cloud, including Windows Azure's Internet as a Service
How would you define and describe integrity : Keep in mind Integrity or the principal of Integrity from a professional standard of conduct when answering the questions.
What formula do you input in the cells for number : What formula do you input in the cells for number 7 to get the answer for each cell?
Find the amount of goodwill that acme will record : Find the amount of goodwill that Acme will record on its balance sheet as a result of this acquisition? How do you recommend the firm finance this transaction
Singapore airlines human resources management : What is the similarities in Singapore Airlines Human Resources Management and Delta Airlines?
Routing protocols : Routing protocols use metrics to decide on the best path on the network.
What the appropriate journal entry to record acquisition : Question - Jackson Limited acquired a bundle of assets for a cash consideration of $200 000. What the appropriate journal entry to record acquisition
Management ethics for school administrators : How do ethical dimensions of leadership processes relate to leadership practices and why is this connection important?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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!

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