Question
Hi, Please help with the following exercise: B52 Corporation's pre-tax accounting income of $726,000 for the year 2018 included the following items: Amortization of identifiable
Hi,
Please help with the following exercise:
B52 Corporation's pre-tax accounting income of $726,000 for the year 2018 included the following items:
Amortization of identifiable intangibles$140,000
Depreciation of building119,000
Loss from discontinued operations46,000
Unusual, non-recurring gains157,000
Profit-sharing payments to employees69,300
Lush Industries Ltd. would like to purchase B52 Corporation. In trying to measure B52's normalized earnings for 2018, Lush determines that the building's fair value is triple the book value and that its remaining economic life is double the life that B52 is using. Lush would continue the profit-sharing payments to employees, with the payments being based on income from continuing operations before amortization and depreciation.
1. Please how to calculate the 2018 normalized earnings amount of B52 Corporation that Lush would use to calculate goodwill.
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