On 1 July 2020, Tall Ltd acquired all of the assets and liabilities of Blacks Ltd. In exchange for these assets and liabilities, Tall Ltd issued 100 000 shares that at date of issue had a fair value of $6.30 per share. Costs of issuing these shares amounted to $1000. Legal costs associated with the acquisition of Blacks Ltd amounted to $4200.
The asset and liabilities of Blacks Ltd at 1 July 2020 were as follows:
Carrying amount Fair value
Assets
Cash $1 000 $1 000
Accounts receivable 10 000 10 000
Inventory 64 000 68 000
Equipment 320 000 232 000
Accumulated depreciation – equipment (96 000) —
Patents 240 000 280 000
Liabilities
Accounts payable (16 000) (16 000)
Debentures (64 000) (64 000)
The accountant for Tall Ltd, Mr Spencer, knows that AASB 3 has to be applied in accounting for business combinations. However, he is confused as to how to account for the goodwill, what recognition criteria is applied to assets and liabilities acquired in the business combination, and how the varying dates such as the date of exchange and acquisition date will affect the accounting for the business combination.
Provide Mr Spencer with advice on the issues that are confusing him.
Required
In: Accounting
Study 3 (Total = 25 Marks)
Business Combination
On 1 July 2020, Tall Ltd acquired all of the assets and liabilities
of Blacks Ltd. In exchange for these assets and liabilities, Tall
Ltd issued 100 000 shares that at date of issue had a fair value of
$6.30 per share. Costs of issuing these shares amounted to $1000.
Legal costs associated with the acquisition of Blacks Ltd amounted
to $4200.
The asset and liabilities of Blacks Ltd at 1 July 2020 were as
follows:
Carrying amount Fair value
Assets
Cash $1 000 $1 000
Accounts receivable 10 000 10 000
Inventory 64 000 68 000
Equipment 320 000 232 000
Accumulated depreciation – equipment (96 000) —
Patents 240 000 280 000
Liabilities
Accounts payable (16 000) (16 000)
Debentures (64 000) (64 000)
The accountant for Tall Ltd, Mr Spencer, knows that AASB 3 has to
be applied in accounting for business combinations. However, he is
confused as to how to account for the goodwill, what recognition
criteria is applied to assets and liabilities acquired in the
business combination, and how the varying dates such as the date of
exchange and acquisition date will affect the accounting for the
business combination.
Provide Mr Spencer with advice on the issues that are confusing
him.
Required
1. Explain how to account for goodwill.
2. Discuss the importance of identifying the acquisition date
3. What recognition criteria is applied to assets and liabilities
acquired in the business combination. Explain.
4. Prepare the acquisition analysis at 1 July 2020 for the
acquisition of Blacks Ltd by Tall Ltd.
5. Prepare the journal entries in the records of Tall Ltd at 1 July
2020.
In: Accounting
_______ serves as the most direct indicator of economic growth in the United States.
Multiple choice answers
a) The unemployment rate.
b) Gross domestic product (GDP)
c) The industrial production index.
d) None of these is correct.
In: Finance
a. Explain whether or not the United States is a meritocracy and the relationship meritocracy has to inequality.
b. what has happened to economic mobility over the last several decades. What has happened to the wealth gap over the last sixty years?
c. how more recent trends in deunionization, wages, income, taxes, and safety net programs have made it even harder for people to earn a decent living, let alone become millionaires.
In: Economics
When comparing the healthcare system in France with that in the United States, one of the key differences is that
| the French are able to obtain lower overall healthcare costs because the government is the only payer of healthcare expenses, and there is no private insurance. |
| the French are able to obtain lower overall healthcare costs because the government pays for most medical care, and private health insurance is held by nearly all to cover the remainder of needed medical care. |
| Americans are able to obtain lower overall healthcare costs because of the lack of government involvement. |
| Americans are able to obtain lower overall healthcare costs because most people have insurance. |
| the French are able to obtain lower overall healthcare costs because the French are discouraged from making use of costly procedures for serious healthcare conditions. |
In: Economics
The “Economic Report to the President of the United States” included data on the amounts of manufacturers′ new and unfilled orders in millions of dollars. Shown here are the figures for new orders over a 8-year period:
| Year | Order |
| 1 | 54,097 |
| 2 | 54,259 |
| 3 | 55,022 |
| 4 | 55,921 |
| 5 | 62,941 |
| 6 | 64,182 |
| 7 | 72,553 |
| 8 | 76,003 |
Assuming that weights of 5, 3 and 1 are given to the past three periods (i.e. a weight of 5 being given to time period t – 1, a weight of 3 being given to time period t – 2, and a weight of 1 being given to time period t – 3), what would be the forecasts for years 4, 5, 6, 7, 8 and 9 using a 3-year weighted moving average model with? What would be the MAD (Mean Absolute Deviation) and MSE (Mean Square Error) for this forecasting model?
In: Statistics and Probability
And then an advantage and disadvantage of each approach. GNP and NI in the United States
Next though is how does the US government HELP creat GNP and NI.
And then how can the US government HURT GDP and NI.
As such how do YOU THINK we can define the governmental role most suitable for creating and sustaining a good, health, GDP and NI.
In: Economics
There are many more infections and diseases that are affecting people in the United States and around the world that were not included in the readings. Pick one and describe three actions you could put in place to create awareness or control the spread of these infections and diseases in an early childhood program.
In: Nursing
This question asks you to consider the market for vitamins in the United States. For this question, please assume that there are many small vitamin manufacturers in the U.S. market, so that the market is perfectly competitive.
a)Begin by depicting the market for vitamins in long-run equilibrium. Using two diagrams, one to represent the market for vitamins, and a second to represent the costs of a typical vitamin manufacturer, illustrate the current price, quantity and profits of a typical vitamin manufacturer. Explain why you have drawn the curves as you did.
b) Suppose that the recent health care reform includes a provision providing substantial insurance premium discounts for any U.S. citizen who takes a daily vitamin. Show how such a mandate affects the short-run market equilibrium, price, and profits of a typical vitamin manufacturer. Using one diagram for the vitamin market and a second for a typical firm.
c) Will the scenario you have described in part (b) be a stable long-run equilibrium? Why or why not? Once again using separate diagrams for both the industry and a typical firm, illustrate the new long run equilibrium for the vitamin market.
d) To avoid the possibility you discuss in (c), the vitamin industry has proposed a licensing scheme. Only licensed vitamin manufacturers will be allowed to sell vitamins in the United States, and the number of licenses available will be limited. How would such a licensing requirement affect your answer to part (c)? Why?
In: Economics
It is very easy to start a corporation in the United States. Take a look at how easy it is to start a corporation in Azerbaijan or China. Do you believe there is a link between ease of starting businesses and overall economic efficiency?
In: Economics