CASE B Mr. RVC acquired his business for ₱3,000,000. The fair market value of the business is ₱5,000,000. Will it be more useful if the accounting records were adjusted corresponding to the fair market value amount of the business? Justify your answer.

CASE B Mr. RVC acquired his business for ₱3,000,000. The fair market value of the business is ₱5,000,000. Will it be more useful if the accounting records were adjusted corresponding to the fair market value amount of the business? Justify your answer.

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter4: Corporations: Organization And Capital Structure

Section: Chapter Questions

Problem 36P

See similar textbooks

Related questions

Q: Which one of the following variables is not explicitly considered in the computation of the Economic...

A: Economic Order Quantity is entity's optimal order quantity to minimize total costs retated to orderi...

Q: Turner, Roth, and Lowe are partners who share income and loss in a 1:4:5 ratio (in percents: Turner,...

A: Solution Partnership is an arrangement between two or more people to oversee business operations and...

Q: On 31st January, 2021 the Balance as per Pass book of S.V. Ltd. is $ 505,500. Prepare a Bank Reconci...

A: Bank reconciliation: It is a statement drawn up by the business to verify the cash book balance with...

Q: On December 31, 2019, Ana Inc. sold merchandise for P750,000 to Ysa Inc. The terms of the sales were...

A: Lets understand the basics. When any error found out after the closing books of account of years the...

Q: Bulldogs Inc. wants to analyze its variances in its actual and budgeted operation. · There is...

A: Sales price variance is the difference between Actual Sales and Budgeted sales Estimated by the com...

Q: A loan of $400,000 with

A: This is used in case of lump-sum money accumulates in the future if interest is charged on periodic...

Q: On September 30,2021, when the carrying amount of the assets of a major subsidiary was P70,000,000, ...

A: Discontinued operations are accounting words that refer to parts of a company's operations that have...

Q: Garcia Company rents out a portion of its building to Jerry Company for $1,000 per month. On August ...

A: Journal Entry: Journal entry is the act of keeping records of transactions in an accounting journal....

Q: G’s investment account relates to its debt investments and its equity investments. For balance sheet...

A: G's Investment as follows: Particulars Bond held as Trading Investment Bond held as Available for...

Q: ABC Manufacturing Co. Balance sheet December 31, 2020 Assets Liabilities and Capital Cash 240,000 Ac...

A: ratio is calculated by each company in the industry and comparison is done at the various ratio with...

Q: Don Adams Breweries is considering an expansion project with an investment of P1,500,000. The equipm...

A: Solution: Initial investment = P1,500,000 Annual cash inflows = P450,000 Period = 5 Years

Q: Wayne, Wendell and Wesley are partners who share profits and losses equally. Their financial positio...

A: Statement of liquidation includes the amount of assets realized and liabilities paid.

Q: a long dispute, AA, BB, and CC decided to liquidate their partnership. Their capital balances as of ...

A: The last preferred options in case of partnership phase liquidation which is considered to be most p...

Q: a. Calculate return on investment, based on net income and average total assets, for 2020 and 2019. ...

A: "Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and ...

Q: Differentiate between centralized and decentralized operations. Also, differentiate between a prof...

A: Departmentalization: Departmentalization is a cycle wherein occupations or groups are joined togethe...

Q: Internal Controls are very Important for any Organization because hey will detect the potential frau...

A: internal control is most important, internal control primary purpose is to help the organisation sa...

Q: The IS-23518 company reports the following information for last year: Sales Direct labor cost Raw ma...

A: Overheads: Overheads, or overhead costs, suggest a constant expense of running a business. Overheads...

Q: Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near ...

A: Lets understand the basics. For calculating activity variance, budgeted cost for decided activity is...

Q: The JOC-10847 company uses a job-order costing system with a predetermined overhead rate using direc...

A: Predetermined overhead rate Variable overhead rate - $4.60 Add Fixed overhead rate = Fixed MOH cos...

Q: Starfax, Inc., manufactures a small part that is widely used in various electronic products such as ...

A: Absorption Costing :- In this system of costing the variable as w...

Q: The Caribbean Industrial Producers manufactures two products, “Zinc” and” “Ply”. The following sales...

A: GIVEN The Caribbean Industrial Producers manufactures two products, “Zinc” and” “Ply”. The follo...

Q: Hana Coffee Company roasts and packs coffee beans. The process begins by placing coffee beans into t...

A: Solution: Under FIFO method of process costing, beginning WIP inventory cost is not included in comp...

Q: During 2022, Emerald Inc. decided to change from FIFO method of inventory valuation to the weighted ...

A: The correct answer for the above mentioned question is given in the following steps for your referen...

Q: 10. A project is predicted to make an NPV of £24m in a boom, £16m in a medium growth economy and lo...

A: ANSWER THE CORRECT OPTION IS A)£10m THE EXPECTED NPV IS A)£10m COMPUTATION OF EXPECTED NPV NPV ...

Q: Max Inc. had 300,000 ordinary shares issued and outstanding at December 31, 2020. On July 1, 2021 an...

A: Earnings per share = (Net income - Preferred dividend) / Weighted average no. of Ordinary shares out...

Q: Blonde, Inc., is considering dropping a certain product line if it does not have a margin of safety ...

A: Lets understand the meaning of margin of safety. Margin of safety is a all sales over a break even p...

Q: In a balanced balance sheet, if assets are equal to $95, 000 and liabilities are $51,000, then owner...

A: An accounting equation refers to a mathematical representation of the transaction. It indicates that...

Q: Find the APR for the following 5-year loan: A principal of £15,000 with a stated annual interest rat...

A: Excel formula which is used to calculate APR Formula:- APR =[ {(Interest + Fees )/ Loan amount} / N...

Q: Activity No. 12 Master Budget Computation Furniture Manufacturing Company - School Desk Division Sch...

A: Budgeting is an Estimation of Expected Expenses or a particular production to be need in Future. Sal...

Q: Arrow Industries employs a standard cost system in which direct materials inventory is carried at st...

A: Direct Labor usage (efficiency) variance = (Actual hours worked - Standard hours allowed) x Standard...

Q: airT iniog mort hot 10ms on Aon piee spese busbe.ce 9 Selling Price: P 1,700 6 25 Fixed expenses Sel...

A: For calculation of Contribution margin required sales price and variable cost but in this questi...

Q: LACICIE Prarra a. At the beginning of the year, Addison Company's assets are $200,000 and its equity...

A: Please see Step 2 for the required information.

Q: Required information Exercise 7-7 (Algo) Other accrued liabilities-payroll taxes LO 4 [The following...

A: As per accounting equation, Assets = Liabilities + Equity Equity includes net income arrived from In...

Q: How much is the temporary current assets needed during the fourth quarter? * , Bulldogs Inc. has a t...

A: Permanent current asset are the asset in which minimum balance are maintained irrespective of circum...

Q: Real Sdn Bhd did not keep his books of accounts under double entry system. Depreciation on Non-curre...

A: The balances of debtors and creditors account will be transferred to balance sheet and the balance o...

Q: The shareholders' equity section of PRAY Corp. on December 31, 20x1 appeared as follows: Preference ...

A: Unappropriated Retained Earnings Unappropriated Retained earning which is described as the amount wh...

Q: On December 31, 2019, the balance sheet for the XYZ Partnership follows: The percentages shown are ...

A: At the time of liquidation first the outside liabilities are settled and then if any cash remain it ...

Q: Statement 1: The estimated liability on contingent consideration is based on provisional amount subj...

A: Solution Estimated liability is a liability That is absolutely owed because the services or goods h...

Q: reenwood Company manufactures two products—15,000 units of Product Y and 7,000 units of Product Z. T...

A: The plant-wide overhead rate can be calculated by dividing the total estimated overhead rate by dire...

Q: On June 1 of the current year, Pamela Schatz established a business to manage rental property. She c...

A: The accounting equation states that assets equal to sum of liabilities and equity. The business tran...

Q: The Moto Hotel opened for business on May 1, 2017. Here is its trial balance before adjustment on Ma...

A: Financial statements are those statements or the records which are prepared by companies during fisc...

Q: Of Peterson Enterprises’ $1.4 billion in assets, $150 million of those assets are in cash or can be ...

A: Lets understand the basics. When company having a higher cash in the books in compare to the industr...

Q: The Caribbean Industrial Producers manufactures two products, “Zinc” and” “Ply”. The following sales...

A: Solution Budget is an estimation of revenue and expenses over a specified future period of time.

Q: NEKO Inc. sells on term 3/20, net 40. Total sale for the year are P1,200,000 on which 40% is cash sa...

A: Calculation of days of sales outstanding = 30% x 20 = 6 days Calculation of credit sales = Tot...

Q: MAKE or BUY

A: Make or buy are the two options that every company has to choose between that whether manufacturing ...

Q: - Choose one nature of organization (SINGLE PROPRIETOR, PARTNERSHIP, CORPORATION) - Based on your ch...

A: In the above question , we are having three nature of organization and I choose partnership for expl...

Q: ACC 307 – HW #4 – Chapters 7 and 8 The Beal Manufacturing Company’s costing system has two direct-co...

A: Note: As per our guidelines only the first three subparts will be solved 1. Particulars Per uni...

Q: FAUSTINO Inc. manufactures two products, MICHAEL and GABRIEL. Contribution margin per unit is determ...

A: Lets understand the basics. When entity have any scare resources then management always wants to use...

Q: When should the right of redemption be exercised in extrajudicial foreclosure of real estate mortgag...

A: The correct answer for the above mentioned question is given in the following steps for your referen...

Q: On January 4, 2022, Party Corporation purchase 80% of Summer Company’s ordinary share for P810,000 w...

A: summer company net income is 181250 less dividend paid 30000 so noncontrolling interest in the net i...

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Financial Reporting in Hyperinflationary Economies

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Mr Pierre acquired his business for P10,000,000. The fair market value of the business is P11,000,000. Will it be more useful if accounting records were adjusted corresponding to the fair market value amount of the business? Justify your answer.
Mr.Pierre acquired his business for P10,000.The fair market value of the business is P11,000.Will it be more usefull if accounting records were adjusted corresponding to the fair market value amount of the business?
Case: Mr. ABC acquired his business for P3 million. The fair market value of the business is P5 million. Will it be useful if accounting records were adjusted corresponding to the fair market value amount of the business? Justify your answer.
a) Land with an assessed value of $750,000 for property tax purposes is acquired by a business for $900,000. Ten years later, the plot of land has an assessed value of $1,200,000 and the business recieves an offer of $2,000,000 for it. Should the monetary amount assigned to the land in the business records now be increased? b) Assuming that the land acquired in (a) was sold for $2,125,00, how would the various elements of the accounting equation be affected?
Russell Corporation sold a parcel of land valued at $400,000. Its basis in the land was $275,000. For the land, Russell received $50,000 in cash in yar 0 and a note providing that Russell will receive $175,000 in year 1 and $175,000 in yar 2 from the buyer. What is Russell’s realized gain on the transaction? What is Russell’s realized gain in year 0, year 1, and year 2?
Mr. Reyes disposed his principal residence for P2,000,000 and immediately acquired a new one for P1,800,000. The old residence cost Mr. Reyes P1,000,000 and had a fair market value of P2,500,000 on the date of sale.Compute the capital gains tax to be deposited in escrow.
a. Land with an assessed value of $750,000 for property tax purposes is acquired by a business for $900,000. Ten years later, the plot of land has an assessed value of $1,200,000 and the business receives an offer of $2,000,000 for it. b. Assuming that the land acquired in (a) was sold for $2;125,000, how would the various elements of the accounting equation be affected? Answer sub-part b alone.
in year 0, Longworth Partnership purchased a machine for $40,000 to use in its business. In year 3, Longworth sold the machine for $35,000. Between the date of purchase and the date of the sale, Longworth depreciated the machine by $22,000. What are the amount and character of the gain or loss Longworth will recognize on the sale? What are the amount and character of the gain or loss Longworth will recognize on the sale if the sale proceeds are increased to $45,000? What are the amount and character of the gain or loss Longworth will recognize on the sale if the sale proceeds are decreased to $15,000?