The Following Data Pertains to Questions

question 38

Multiple Choice

The following data pertains to questions
Parent and Sub Inc had the following balance sheets on July 31,2007: The Net Incomes for Parent and Sub Inc for the year ended July 31,2007 were $120,000 and $60,000 respectively.
-Assuming the Entity Theory was applied,what would be the amount of Goodwill appearing on the Consolidated Balance Sheet on the Date of acquisition,assuming once again that Parent purchased 80% of Sub Inc.for $180,000?

• A)$137,000
• B)$130,000
• C)$138,000
• D)$88,000

Comprehend how fixed and variable costs influence the cost-volume-profit (CVP) analysis.

Understand the calculation and significance of the margin of safety for business decision-making.

Calculate target income and the impact of changes in sales volume on profitability.

Understand the application and limitations of various methods for analyzing cost behavior.

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Definitions:

Bonuses

Additional compensation given to employees as an incentive or reward for their performance and contribution to the organization.

Incentive Plans

Programs designed to motivate and reward employees for achieving specific performance targets or business goals.

Demotivator

An aspect or condition that reduces motivation or enthusiasm.

Reward

Benefits, compensation, or recognition given to employees in exchange for their work, performance, or a specific achievement.