Johnson corporation purchased all of the outstanding common stock of smith corporation for $11,000,000 in cash. the book value of smith’s net assets (assets minus liabilities) was $7,800,000. the fair values of all of smith’s assets and liabilities were equal to their book values with the following exceptions:
book value fair value
receivables $1,300,000 $ 1,100,000
property, plant, and equipment 8,000,000 9,400,000
intangible assets 200,000 1,200,000
required:
calculate the amount paid for goodwill

Match the given situations to the type of risks that a business may face while taking credit. 1. beta ltd. had taken a loan from a bank for a period of 15 years, but its sales are gradually showing a decline. 2. alpha ltd. has taken a loan for increasing its production and sales, but it has not conducted any research before making this decision. 3. delphi ltd. has an overseas client. the economy of the client’s country is going through severe recession. 4. delphi ltd. has taken a short-term loan from the bank, but its supply chain logistics are not in place. a. foreign exchange risk b. operational risk c. term of loan risk d. revenue projections risk

Which of the following characteristics are emphasized in the accounting for state and local government entities? i. revenues should be matched with expenditures to measure success or failure of the government entity. ii. there is an emphasis on expendability of resources to accomplish objectives. a. i only b. ii only c. i and ii d. neither i nor ii

Because the demand for wheat tends to be inelastic. true or false