Question: My sister started a website called Mouse Savers. She has always loved Mickey Mouse and anything Walt Disney. Her website offers a social integration service,

My sister started a website called Mouse Savers. She has always loved Mickey Mouse and anything Walt Disney. Her website offers a social integration service, connecting Disney vendors and Disney consumers. I was shocked when my sister collected over $1,000,000 in sales revenue during her first year of business. Her website's popularity has grown consistently. After seeing the exponential growth in the first five years, I believe this website has even more potential. I asked my sister if she would sell her website business to me (so she can spend more time with my nieces & nephews). My sister's lawyer contacted me yesterday, and stated a purchase price of $4,500,000. I do not know how this figure was computed. Why is the purchase price different than the balance sheet's net assets
The Mouse Savers 12/31/2014 balance sheet includes: accounts receivable $2,330,000, note payable $500,000, discount on note payable $100,000. The corresponding fair values are: accounts receivable $2,330,000, note payable $490,000, discount on note payable $100,000.

Step by Step Solution

★★★★★

3.48 Rating (174 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

After seeing the exponential growth in the first five years you believe that this ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1019-B-C-F-D-F(2633).docx

120 KBs Word File

Students Have Also Explored These Related Corporate Finance Questions!

Read the article "An Unholy Trinity: Three Ways Employees Embezzle Cash." Describe how billing schemes, payroll schemes, and expense reimbursement schemes are perpetrated to answer the following...

1. Irad Liu, of Commerce, Texas, is in the 25 percent marginal tax bracket and is considering the tax consequences of investing $2000 at the end of each year for 30 years in a tax-sheltered...

Consider the following linear version of the AA-DD model in the text: Consumption is given by C = (1 - s)Y and the current account balance is given by CA = aE - mY. (In macroeconomics textbooks, s is...

My sister started a website called Mouse Savers. She has always loved Mickey Mouse and anything Walt Disney. Her website offers a social integration service, connecting Disney vendors and Disney...

please complete the answer sheet using 2016 annual report Financial Statement Analysis Project ANSWER SHEET Name(s): No. Question 1. Who is responsible for the financial statements and maintaining...

Incorporate each individual's work to conduct a final summary. Finalize an answer to the Group Discussion Summary. The three questions we were tasked to answer were: 1. Identify genetic strategies...

Please the following Question: Case Issues: 1. Issue: Reliance on the iPhone and iPad Has been reliant on the iPhone as its primary source of revenue. Plan option: Can they promote the iPhone more?...

SEPTEMBER-OCTOBER 1 9 9 6 SIOI by James C. Collins and Jerry I. Porras We shall not cease from exploration And the end of all our exploring Will he to arrive where we started And know the place for...

Read below and look around at your organization, whether your school or workplace. What three ideas can you come up with right away for possible innovations? How would your ideas, if implemented,...

3. Compute the first partial derivatives of the following functions, with respect to x and y: a.) f (x, y) = x + 2y b.) f(x, y) = 2xy c.) f (x, y) = (4x)(2y) d.) f(x, y)= 2xy + 8 e.) (x, y)= 4x.50.3...

You are tased with two Jamaican companies: Honey Bun Ltd and Consolidated Bakeries Ltd you are to prepare a single comprehensive report which addresses the following: 1. using the photo below prepare...

Crow Corporation invests $10 million in fixed assets and its accounts payable increase by $5 million. The fixed asset increase is a _____ of funds and the payable increase is a _____ of funds

1. Solve for effect on the money component of foreign welfare following a permanent home money shock in the Redux model. (a) Begin by showing that U3 t = M P 0 1 P t + 1 P Next, show that P t =...

Draw both cis- and trans-1, 3-dimethylcyclohexane in their most stable chair conformations. (a) How many stereo isomers are there of cis-l, 3-dimethylcyclohcxane, and how many of trans-1,...

Cis-1, 2-Dimethylcyclohexane is optically inactive even though it has two chirality centers. Explain.

Well see in the next chapter that alkyl halides react with nucleophiles to give substitution products by a mechanism that involves inversion of stereochemistry at carbon: Draw the reaction of...

The mean height of an adult giraffe is 19 feet. Suppose that the distribution is normally distributed with standard deviation 0.9 feet. Let X be the height of a randomly selected adult giraffe. Round...

At December 31, 2012, Percheron Inc. had a deferred tax asset of $30,000. At December 31, 2013, the deferred tax asset is $59,000. The corporation's 2013 current tax expense is $61,000. What amount...

Question 1 You are negotiating to make a 10-year loan of $35,000 to "ABC" Company. According to the agreement "ABC" Company will pay the loan in the following manner: 1. $2,500 at the end of Year 1,...