Assume you are starting a business with 1000 shares outstanding. The business is projected to have $80,000 in income by year 3. The industry has an average P/E ratio of 20. A friend is considering investing $50,000 in your venture today and requires 35% return on her investment annually.

a. What is the % ownership acquired by your friend in return of her investment?

b. How many shares to be issued to your friend?

c. What is the price per share?

d. Compute the pre-money and post-money value of the business.

e. Assume you plan to get a second round of financing at the end of year 1 worth another $50,000. Compute the % ownership acquired by the second investor.

f. What is the founder’s new % ownership in the venture?

g. What is the new total number of shares in the venture?

DLW Corporation acquired and placed in service the following assets during the year: Date Cost Asset Acquired Basis Computer equipment 3/3 $ 17,000 Furniture 1/19 25,700 Commercial building 9/22 321,000 Assuming DLW does not elect §179 expensing and elects not to use bonus depreciation, answer the following questions: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)

b. What is DLW's year 3 cost recovery for each asset if DLW sells all of these assets on 2/2 of year 3?

The P Ltd acquires all issued capital of the S Ltd for a consideration of $1,000,000 cash and 800,000 shares each valued at $1.50. The summary statement of the financial position of the subsidiary company immediately following the acquisition is: Fair value of assets acquired $2,640,000 Fair value of liabilities acquired $720,000 Total shareholders’ equity of the subsidiary company $800,000 Retained earnings of the subsidiary company $1,120,000 Required:

(a) Pass the necessary journal entry to record the acquisition

(b) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition

(c) Pass the necessary consolidation entry to eliminate the subsidiary by the parent company .

(d) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition if the purchase consideration paid was $1,000,000 cash and 400,000 shares each valued at $1.50

The P Ltd acquires all issued capital of the S Ltd for a consideration of $1,000,000 cash and 800,000 shares each valued at $1.50. The summary statement of the financial position of the subsidiary company immediately following the acquisition is: Fair value of assets acquired $2,640,000 Fair value of liabilities acquired $720,000 Total shareholders’ equity of the subsidiary company $800,000 Retained earnings of the subsidiary company $1,120,000

Required: (a) Pass the necessary journal entry to record the acquisition (b) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition (c) Pass the necessary consolidation entry to eliminate the subsidiary by the parent company (d) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition if the purchase consideration paid was $1,000,000 cash and 400,000 shares each valued at $1.50

The Parent company acquires all issued capital of the subsidiary company for a consideration of $1000000 cash and 800000 shares each valued at $1.25. The summary statement of financial position of the subsidiary company immediately following the acquisition is: Fair value of assets acquired $2640000 Fair value of liabilities acquired $720000 Total shareholders’ equity of the subsidiary company $800000 Retained earnings of the subsidiary company $1120000 Required: (i) Pass the necessary journal entry to record the acquisition (ii) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition. (iii) Pass the necessary consolidation entry to eliminate the subsidiary by the parent company. (iii) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition if the purchase consideration paid was $1000000 cash and 400000 shares each valued at $1.25.

Maben Company was started on January 1, 2018, and experienced the following events during its first year of operation:

Acquired $35,000 cash from the issue of common stock.

Borrowed $47,000 cash from National Bank.

Earned cash revenues of $63,000 for performing services.

Paid cash expenses of $52,500.

Paid a $2,500 cash dividend to the stockholders.

Acquired an additional $35,000 cash from the issue of common stock.

Paid $12,000 cash to reduce the principal balance of the bank note.

Paid $46,000 cash to purchase land.

Determined that the market value of the land is $64,000.

Determine the percentage of assets that were provided by investors, creditors, and earnings. (Round your answers to 2 decimal places.) Just need investors and Earnings please

1. At a total cost of $2,064,000, Herrera Corporation acquired 160,000 shares of Tran Corp. common stock as a long-term investment. Herrera Corporation uses the equity method of accounting for this investment. Tran Corp. has 400,000 shares of common stock outstanding, including the shares acquired by Herrera Corporation.

   a. Journalize the entries by Herrera Corporation to record the following information:

   1. Tran Corp. reports net income of $3,720,000 for the current period.

   2. A cash dividend of $1.70 per common share is paid by Tran Corp. during the current period.

   b. Why is the equity method appropriate for the Tran Corp. investment?

   An investment amount ____ of the outstanding common stock of the investee is presumed to represent significant influence. The equity method is appropriate when the investor ____ exercise significant influence over the investee.

Identify whether each of the following would or would not be recorded as an intangible asset in the financial statement of Hummings as at the end of the reporting period of 30 June 2016 according to AASB 138 intangible assets.

1. Hummings has acquired copyrights for $240,000, The copyright (intangible)has a useful life of 50 years and over this time period is expected to generate future economic benefits well in excess of its cost of purchases.

2. Hummings spent $600,000 over the past 5 years on the design and promotion of its brad. It is expected that such expenditure will provide significant economic benefits well in excess of the costs of promoting the brand.

3. On 1 July 2015 Hummings acquired another company (XYZ Ltd). Goodwill of $35,000 has been recognized on the purchase.