Use the Following Information for Questions

question 52

Multiple Choice

Use the following information for questions
Jeremiah Inc.is being targeted for acquisition by Argo Corporation.As an analyst for
Argo, you are asked to determine the goodwill that, pending various assumptions, may be inherent in this potential transaction.
The available information relating to Jeremiah includes the following: Current net assets: $5.1 million.
Expected return on net asset for industry: 10%
Reported net income for the previous six consecutive years:

The earnings for 2007 included a $200,000 gain from the sale of a discontinued part of its business.
-Estimated goodwill by capitalizing average excess earnings at 14% is

• A)$1,791,667
• B)$760,833
• C)$2,029,762
• D)$1,654,331

Understand the role of smoothing in resource requirement profiles and its impact on costs.

Comprehend the principles and application of DRP (Distribution Requirements Planning) in a distribution network.

Grasp the concept and operational benefits of closed-loop MRP systems.

Identify the benefits and challenges associated with implementing ERP (Enterprise Resource Planning) systems.

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Definitions:

Ending Inventory Cost

The total value of all goods available for sale at the end of an accounting period, calculated using a specific inventory costing method like FIFO or LIFO.

Physical Inventory

A process of counting and verifying the actual inventory on hand at a specific time, typically used to validate inventory records and adjust discrepancies.

Periodic System

An inventory tracking system that updates inventory balances after a specific period, based on physical inventory counts.

First-In

Often used in the context of inventory management, "First-In" refers to goods that were acquired or produced first being sold, used, or disposed of first.