Discuss two motivations that managers may have for attempting to influence or bias reported financial results?

 

B) Suggest one (1) way this behaviour can be minimised ?

 

c) Assume that a drilling machine is acquired for the following consideration:

• cash: $200,000
• shares: 20,000 shares with a market value of $4.50 each
• Machine: Cost $100,000, accumulated depreciation, $75,000, fair value $37,000

 

The buying company also agrees to assume the liability of the selling company's accounts payable of $25 000 as part of the drilling machine acquisition.

 

Required:  Calculate the acquisition cost of the drilling machine