Your friend Tom Smith has decided to expand Smith Sales Company. He has acquired an expansion loan and purchased $500,000 of plant assets as part of the expansion. Tom values your advice and requests your help in properly depreciating the plant assets. Tom has paid you well for your advice and you readily accept the challenge.

Explain the different methods that can be used to calculate depreciation including: Straight-line, Double declining balance, Units of production & Sum of years digits.

Firm X is being acquired by Firm Y for $35,000 worth of Firm Y stock (valued at the pre-merger current price of Y). Both firms are all-equity financed. The incremental value created by the merger is $2,500. Firm X has 2,000 shares of stock outstanding at $16 per share. Firm Y has 1,200 shares of stock outstanding at a price of $40 per share. What is the actual cost of the acquisition to Firm Y using company stock? Why is the actual cost less than $35,000?

1. Firm X is being acquired by Firm Y for $35,000 worth of Firm Y stock (valued at the pre-merger current price of Y). Both firms are “all-equity” financed. The incremental value created by the merger is $2,500. Firm X has 2,000 shares of stock outstanding at $16 per share. Firm Y has 1,200 shares of stock outstanding at a price of $40 per share. What is the actual cost of the acquisition to Firm Y using company stock? Why is the actual cost less than $35,000?

If a company such as IBM includes other gains and losses in its sales, general and administrative expenses, w

What is the value per share be of a company with the following dividends?

Next years Dividend is expected to be $1.40

Expect Div Growth rates

13.40%

12.70%

10.80%

9.65%

7.70%

ROE = 13.47%

Plowback Rate= 61%

US T-BILL = 1.15%

BETA = 1.07

expect ret in Mkt = 10.83%

Please compute with excel

xercise 12-25 (Algo) Fair value option; held-to-maturity investments [LO12-1, 12-2, 12-3, 12-8] Tanner-UNF Corporation acquired as a long-term investment $290 million of 6% bonds, dated July 1, on July 1, 2021. Company management has the positive intent and ability to hold the bonds until maturity, but when the bonds were acquired Tanner-UNF decided to elect the fair value option for accounting for its investment. The market interest rate (yield) was 7% for bonds of similar risk and maturity. Tanner-UNF paid $260 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2021, was $270 million. Required: 1. How would this investment be classified on Tanner-UNF's balance sheet? 2. to 4. Prepare the journal entry to record Tanner-UNF’s investment in the bonds on July 1, 2021, interest on December 31, 2021, at the effective (market) and fair value changes as of December 31, 2021. 5. At what amount will Tanner-UNF report its investment in the December 31, 2021, balance sheet? 6. Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2022, for $250 million. Prepare the journal entries to record the sale.

On January 3, 2018, Matteson Corporation acquired 40 percent of the outstanding common stock of O’Toole Company for $1,379,000. This acquisition gave Matteson the ability to exercise significant influence over the investee. The book value of the acquired shares was $863,000. Any excess cost over the underlying book value was assigned to a copyright that was undervalued on its balance sheet. This copyright has a remaining useful life of 10 years. For the year ended December 31, 2018, O’Toole reported net income of $353,000 and declared cash dividends of $35,000.The fair value of the O'Toole Company stock on December 31, 2018 was $1,410,000.

Requirements:

Shaquille Company pays $1,599,600 to acquire 100% of the common stock of Revolve Incorporated. It assumes that Revolve's plant assets (such as the factory building and land) are undervalued by $43,000. The historical cost of the net assets acquired, excluding goodwill is equal to $1,502,500. Revolve will be held as a division of Shaquille. The following information is available after 1 year the acquisition of the subsidiary company:

Shaquille estimated the fair value of the divisions net assets (excluding goodwill) 1 year after the date of acquisition at 1,609,000.

A. Compute the goodwill recorded on the date of acquisition. (COMPLETED)

B. determine whether goodwill is impaired assuming that the fair value of the Revolve Division with goodwill 1 year after acquisition is equal to 2,004,000. Provide the impairment journal entry, if needed.

C. Determine whether goodwill is impaired assuming that the fair value of the Revolve Division with goodwill 1 year after acquisition is equal to 1,618,000. Prepare the impairment journal entry if needed.

You need a new car and the dealer has offered you a price of $20,000, with the following payment options: (a) pay cash and receive a $2000 rebate, or (b) pay a $5000 down payment and finance the rest with a 0% APR loan over 30 months. But having just quit your job and started an MBA program, you are in debt and you expect to be in debt for at least the next 2 1 2 years. You plan to use credit cards to pay your expenses; luckily you have one with a low (fixed) rate of 15% APR (monthly). Which payment option is best for you?

The Graduate Management Admission Test (GMAT) is a test required for admission into many Master of Business Administration (MBA) programs. Total scores on the GMAT are normally distributed. The Graduate Management Admission Council, who administers the test, claims that the mean total score is 579. (Source: http://www.mba.com/.) Suppose a random sample of 8 students took the test, and their scores are given below.

699, 560, 414, 570, 521, 663, 727, 413

At the 0.05 level of significance, test the claim that the mean score is less than 579.

Set up the curve with the rejection region and critical value. State conclusion in a sentence.