FREE Trial

How does the current purchase method of accounting treat an acquisition? How does this differ from the old purchase method?

How does the "current" purchase method of accounting treat an acquisition? How does this differ from the "old" purchase method?

This problem has been solved!


Do you need an answer to a question different from the above? Ask your question!
  • Tutor Answer

The current purchase treatment method treats the acquired company as an investment This method requi…View the full answer


answer-question
Related Book For  answer-question
Fundamentals Of Financial Management

Fundamentals Of Financial Management

ISBN: 9780273713630

13th Revised Edition

Authors: James Van Horne, John Wachowicz

See More Books
Posted Date: December 07, 2015 05:55:45
See More Questions

Students also viewed these Finance questions

Q:
The following describes Japanese accounting before the Big Bang: The preparation of consolidated financial statements is based on the Securities and Exchange Law. Individual-company accounts are the...
A:
The chapter identifies the following major changes that have occurred since the Japanese big bang a......
Q:
Describe the purchase method of accounting for a business combination.
A:
With the purchase method the firm doing the acquiring r......
Q:
How does the purchase method of accounting affect the income statements, balance sheets, and cash-flow statements of the combined companies?
A:
For financial reporting purposes the targets acquired assets and liabilities are revalued to fair ma......
Q:
A fruit vendor professes to sell fruits at the cost price, but uses false weights. He gains 40% in this manner. What weight does he substitute for one kilogram?
A:
The detailed......
Q:
Refer to Exercise 15.10. Without assuming normal population distributions, test the null hypothesis that the population mean times spent outside the classroom on teaching responsibilities are the...
A:
therefore r......
Q:
You are employed as the Cost Accountant of Gau Steel Technologies and your company is considering the use of Linear programming to achieve optimum resource allocation in its business operations. Your...
A:
Definition of Linear Programming Linear programming is a mathematical optimization technique used to find the best outcome in a mathematical model wit......
Q:
You are preparing for a customer interface meeting and your project sponsor asks you to lie to the customer about certain test results. You should: A. Do as you are told. B. Refuse to work on the...
A:
C Report the mat......
Q:
The income statement of Mazor Company is presented here. Additional information:1. Accounts receivable decreased $380,000 during the year, and inventory decreased $300,000.2. Prepaid expenses...
A:
MAZOR COMPANY Partial Statement of Cash Flows For the Year Ended November 30 2012 Cash flows from o......
Q:
watch the film" The Scarlet Letter" Then consider the following: How close does the movie resemble the novel:? does the movie successfully portray the novels themes' symbol archetypes? How is the...
A:
I don t have the ability to watch a movie or access real time content like The Scarlet Letter film H......
Q:
Bear Park Ltd., a camping ground in the Lake District, has compiled the following financial information as of December 31, 2017. Instructions (a) Determine Bear Park's net income for 2017. (b)...
A:
a Camping fee revenues 140 000 General store revenues 47 000 Total revenue 187 000 Expenses 150......
Q:
Jenni Shover, Inc., has warrants outstanding that allow the holder to purchase three shares of common stock for a total $60 for each warrant that is held. Currently, the market price per share of...
A:
a 3 18 60 6 or zero as the warrant cannot have a negative value b 0 15 1......
Q:
Why does it matter whether an acquisition is made with cash or with common stock?
A:
With a cash acquisition the selling company s shareholders must immediately recognize any ca......
Q:
Comparative financial statement data of Tennyson, Inc., follow: 1. Market price of Tennyson's common stock: $43.51 at December 31, 2017, and $31.36 at December 31, 2016 2. Common shares outstanding:...
A:
Comparative financial statement data of Tennyson Req 1 2017 2016 a Current ratio 362 000 1 81 3......
Q:
Givinci has two operating (production) departments supported by a number of service departments. Machining Department/ Assembly Department Sales 724,404 /$356,796 Cost of goods sold 327,600/ 121,200...
A:
To calculate the departmental contribution to overhead for the Givinci Dept we need to allocate the......
Q:
BlendWell Inc., a firm manufacturing blenders, has fixed costs of $250,000, variable costs of $45 per unit of output, and expected unit sales of 50,000 units. What is the unit cost of a blender...
A:
I apologize for the confusion in my previous responses The corr......
Q:
A square footing that will carrying a total load of 850 kN is to be constructed on a uniform dense clean gravel. The gravel has a dry unit weight of 21.4 kN/m, and its angle of internal friction is...
A:
To determine the minimum realistic dimensions of the proposed footing consider the bearing capacity......
Q:
Greener Pastures Corporation borrowed $1,500,000 on November 1, 2015. The note carried an interest rate of 12 percent with principal and interest due June 1, 2016. (a) The note issued on November 1....
A:
javascriptCopy code Date Account Debit Credit Nov 1 2015 Cash 1 500......
Q:
Sid Alvarez, another accounting student in our class, makes the statement "Retained earnings is like a bank account that you can withdraw from." 1. Agree with Sid's Statement or not? 2. Why agreed or...
A:
I understand Sid s analogy but I would slightly disagree w......
Q:
If f is continuous on R, prove that For the case where f (x) > 0 and 0 < a < b, draw a diagram to interpret this equation geometrically as an equality of areas. Lf-9) dx = [,1(0)dx (-x) dx =
A:
From the diagram we see that the equali......
Q:
Linda Lopez opened a beauty studio, Lindas Salon, on January 2, 2011. The salon also sells beauty supplies. In January 2012, Lopez realized she had never filed any tax reports for her business and...
A:
1 Current liabilities determined The current liabilities of Linda s Salon as of December 31 2011 are as follows 2 User Insight Additional information......
Q:
At the end of last year, Roberts Inc. reported the following income statement (in millions of dollars): Looking ahead to the following year, the companys CFO has assembled the following information: ...
A:
Actual Forecast Basis Pro Forma Sales 3 000 1......
Q:
At year-end 2005, total assets for Ambrose Inc. were $1.2 million and accounts payable were $375,000. Sales, which in 2005 were $2.5 million, are expected to increase by 25 percent in 2006. Total...
A:
a Accounts payable Long term debt Common stock Retained earnings 1 200 000 375 000 Long term debt 42......
Q:
Pierce Furnishings generated $2.0 million in sales during 2005, and its year-end total assets were $1.5 million. Also, at year-end 2005, current liabilities were $500,000, consisting of $200,000 of...
A:
S 2005 2 000 000 A 2005 1 500 000 CL 2005 500 000 NP 2005 200 000 A P 2005 200 000 Accrued liabi......
Q:
A horizontal 3-mm-thick flat copper plate, 1 m long and 0.5 m wide, is exposed in air at 27?C to radiation from the sun. If the total rate of solar radiation absorbed is 300 W and the combined...
A:
For equilibrium the heat gain......
Q:
A water jet at 60°F with a flow rate of 250 ft 3 /s and a velocity of 75 ft/s hits a stationary V-shaped splitter such that half of the fluid is directed upward and the other half is directed...
A:
Assign 1 to be the initial flow before it hits the splitter and 2 to be the fluid......
Q:
Water enters a boiler with a flow rate of 1 kg/s at 100 kPa, 20oC and leaves as saturated vapor. Assuming no pressure loss and neglecting changes in ke and pe, determine (a) The rate of heat transfer...
A:
Let state 1 represent the inlet and state......
Q:
Measuring the height of a California redwood tree is very difficult because these trees grow to heights over 300 feet. People familiar with these trees understand that the height of a California...
A:
a 62 1411 2 0567X 1 15 6418X 2 where X 1 diameter of the tree at breast height of a person in inches......
Q:
Albert, Betty, and Carol own and operate the Roy Lumber Company. Each contributed one-third of the capital, and they share equally in the profits and losses. Their partnership agreement provides that...
A:
a The Roy Lumber Company Partnership is not liable for the logs Betty is personally liable for the p......
Q:
On July 1, 2010, Jessie Halverson established an interior decorating business, Photogenic Designs. During the month, Jessie Halverson completed the following transactions related to the business:...
A:
1 JOURNAL Post Date Description Ref Debit Credit 2010 July 1 Cash 11 18 000 Jessie Halverson Capital 31 18 000 4 Rent Expense 53 1 750 Cash 11 1 750 1......
Q:
When possible, compute the truth values of the simple components in the following compound propositions. If no truth value can be computed, write a question mark (?) under the letter or letters with...
A:
Click to View...
Q:
Atkinson's Reliable Tools makes two products that use similar raw materials: #587Q and #253X. Estimated production needs for a unit of each product follow. Estimated sales in units by product for...
A:
Productions Budget 587Q 253X Sales 80 000 30 000 Ending inventory 640 900 Beginning inven......
Q:
Use the following data to determine the total amount of working capital. Reyes Draperies and Blinds Corporation Balance Sheet December 31, 2022 Cash Accounts receivable Inventory Prepaid insurance...
A:
Working capital is calculated by subtracting current liabilities from......
Q:
The annual planning process at Century Office Systems, Inc. had been arduous but produced a number of important marketing initiatives for the next year. Most notably, company executives had decided...
A:
1 Pro forma income statement for the Home Office Systems group given the information provided Partic......
Q:
The picture frame with the dimensions shown in the illustration was built with 14 feet of framing material. find x it's width.
A:
2 x x 2 14 ft 2 2x 2 14 4x......
Q:
What pressures led to the exclusion of grey wolves from the ecosystem? Can you think of other keystone species in Canada or North America that have undergone a similar fate? What are the ecosystem...
A:
Grey wolves were hunted to the extinction as large animals like mountain lions wolves and grizzly be......
Q:
Banc Corp. Trust is considering a bank-wide overhead rate or departmental overhead rates to allocate $360,000 of indirect costs. The bank-wide rate could be based on direct labor hours (DLH) or the...
A:
To calculate the total costs for the Consumer Department using a bank wide rate based on the number......
Q:
Universe originates from the Latin word universus, which means whole or entire. Determine whether the following are demonstrative definitions, enumerative definitions, definitions by subclass,...
A:
Universe the whole cosmos including all of space time matter and energy Demonstrative definition Uni......
Q:
House means this: Determine whether the following are demonstrative definitions, enumerative definitions, definitions by subclass, synonymous definitions, etymological definitions, operational...
A:
The definition of house in the image is a demonstrative definition A demonstrative definition is a t......
Q:
A substance is translucent if and only if when held up to a strong light some of the light comes through. Determine whether the following are demonstrative definitions, enumerative definitions,...
A:
Let s analyze each of the provided definitions to determin......
Q:
Insect means something such as a fly, an ant, a wasp, or a caterpillar. Determine whether the following are demonstrative definitions, enumerative definitions, definitions by subclass, synonymous...
A:
The provided statement Insect means something such as a fly an ant a wasp or a......
Q:
Poignant is a word derived from the Latin word pungere, which means prick, pierce, or sting. Determine whether the following are demonstrative definitions, enumerative definitions, definitions by...
A:
The information you provided about the word poignant is related to its etymology specifically its or......
Q:
Assume Stock M has a required return of 12.0% and an initial dividend (DO) of $1.00. If g = 30.0% for the first two years before achieving a constant growth rate of 6.0%, what is the value of Stock M...
A:
To calculate the value of Stock M today we can use the dividend discount model DDM formula which is......
Q:
Identify the most stable compound:
A:
In the com......
Q:
You do not have to agree with Bogles planning strategy. Playing the devils advocate (one who argues for the opposite viewpoint), persuasively present another perspective. (You may want to do some...
A:
An interesting exercise can be to take the devils advocate position regarding the policies of Bogle......
Q:
Write a Lewis structure for each of the following organic molecules All the Diagrams are included in the Solution
A:
Click to View...
Q:
For the previous question, assume that you do not have sufficient savings to cover the entire amount required to start your sun-block business. You are going to have to get external financing. A...
A:
The monthly payment of the loan is 20 000 1 2 000 The cash budget without your investment is as foll......
Q:
If a check correctly written and paid by the bank for $ 648 is incorrectly recorded on the company's books for $ 684 , the appropriate treatment on the bank reconciliation would be to THE ANSWER IS...
A:
add 36 to the book s balance Explanation Since in the question it is given......
Q:
The analysis process for preparing adjusting entries involves two basic steps. Identify the two steps and explain why both are necessary.
A:
This analysis involves just two steps 1 Determine whether the amounts recorded for all assets......
Q:
How would you apply systems thinking to a problem such as poor performance in your current academic studies? What about a problem with a romantic partner or family member? Try to identify all the...
A:
Applying systems thinking to the problem of poor performance in acade......
Q:
(Q B) (A Y) When possible, determine the truth values of the following symbolized statements. Let A and B be true, Y and Z false. P and Q have unknown truth values. If the truth value of the...
A:
Click to View...
Q:
Moravia Company processes and packages cream cheese. The following data have been compiled for the month of April. Conversion activity occurs uniformly throughout the production process. Work ii...
A:
1 Physical Units Work in process April 1 10 000 Units started during April 100 000 Total units to ac......
Q:
pretend that you are studying a farmer's market and how it communicates the culture of its community. what would you study regarding the market and what type of research methodology (Rhetorical,...
A:
Studying a farmer s market to understand how it communicates the culture of its community involves a multidimensional approach considering various asp......
Q:
Air United, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 50 range instruments and 300 pressure gauges were produced, and overhead costs of...
A:
a Computation of activity based overhead cost for year 2017 It is given that there are 50 ranges of......
Q:
Question 16 What is the correct order of mitosis? Prophase, Metaphase, Anaphase, and Telophase Metaphase, Anaphase, Prometaphase, and Telophase Cytokinesis, Interphase, Metaphase, and Anaphase...
A:
Answer Prophase Metaphase Anaphase and Telophose Explanation After t......
Q:
When updating the report on the prior Year's financial statements presented in comparative form the auditor's responsibility for the prior Year's financial statements is a. limited to the previously...
A:
b extended to the date of the updated audit report The extended a......
Q:
When is a business required to track inventory? In every case in which the production, purchase, or sale of merchandise is an income-producing factor for that business. Where its business involves...
A:
When is a business required to tra......
Q:
What are the potential risks in using modeling and analytics?
A:
Using modeling and analytics can be a powerful tool for decision making and problem solving but like any tool it comes with potential risks and limitations Here are some of the potential risks in usin......
Q:
A cost that cannot be changed by any decision made now or in the future is a (an). (a). Indirect cost. (b). Uncontrollable cost. (c). Opportunity cost. (d). Sunk cost.
A:
The correct answer is b Uncontrollable cost An uncontrollable cost is a cost that cannot be changed......
Q:
The measurable value of an alternative use of resources is referred to as a (an). (a). Opportunity cost. (b). Imputed cost. (c). Differential cost. (d). Sunk cost.
A:
The measurable value of an alternative use of resources is referred to as a Opportunity cost EXPL......
Q:
Identify three data sciencerelated technologies from the long list and explore them in more detail. Write a report.
A:
Title Exploring Three Key Data Science Related Technologies Introduction Data science has become an integral part of various industries revolutionizing how organizations collect process and analyze da......
Q:
Some people say that robots and chatbots may increase insurance risk and fees. Research this and write a report.
A:
Title Impact of Robots and Chatbots on Insurance Risk and Fees Executive Summary This report examines the potential impact of robots and chatbots on the insurance industry specifically focusing on the......
Q:
The management at ABC Itd., recognizes that a well-designed internal control system provides many benefits. Among the benefits are reliable financial records that facilitate decision making and a...
A:
Answer Ans a Possible Causes I Due to lack of manpower of division of work a single person is handli......
Q:
The figure shows a bolted lap joint that uses SAE grade 8 bolts. The members are made of cold-drawn AISI 1040 steel. Find the safe tensile shear load F that can be applied to this connection if the...
A:
The tension in the members controls the design Thi......
Rapid Damage Free Robotic Harvesting Of Tomatoes 1st Edition - ISBN: 9811612838 - Free Book