T-Mobile LTE 11:35 AM Done Photo Total Assets (FMV) Total Liab. (FMV) Total Asse
ID: 2597590 • Letter: T
Question
T-Mobile LTE 11:35 AM Done Photo Total Assets (FMV) Total Liab. (FMV) Total Assets (Beak Valus)-40 Toal Liab (Book Value) 150 Price Pai Find Goodwill Anwet Exchange of similar assets Book value (old) FMV (old) 50 26 Find the Answer Which ceat is an EXCEPTION to the rule which states that all costs incurred to purchase a machine are capitalized? Answer 45 What is another name for the LCM Retail Method? me XY? 46 Under which method (FIFO, LIFO or Average) will the result be the same whether using the periodic or perpetual system Answer Sto vth prsent vala h5rExplanation / Answer
42.
The goodwill which needs to be found in this question will be created at the time of acquisition of a company by the other. Here, if the price paid is more than the fair value of identifiable assets then the difference is nothing but the goodwill.
So. here the fair value of net identifiable assets needs to be calculated as follows
1)Fair value of net identifiable assets (Fair Value ) = Assets - Liabilities = 80 - 60 = 20
2) Price paid = 30
So Goodwill = 30 - 20 = 10
*Only fair values only to be taken into account ignoring book values.
44.
The general rule: The costs incurred to bring a fixed asset(here machinery) into working condition for an intended use and its purchase price(obviously)are to be capitalized except training cost.
This is because the training costs initially do not provide any future economic benefit and that is why it's treated as an expense rather for capitalization.
All the other costs incurred say professional fee for engineers, machinery site preparation, delivery and installation, etc. are capitalized because these provide future economic benefits.
Training costs are initially not necessary to make the machinery ready for use and so need not to be included for capitalization.
Conclusion: Training cost is an exception to the rule that ''all costs incurred to purchase a machinery are capitalized''
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.