Why are fair market values used to determine the cost of operating assets acquired in a basket

Question:

Why are fair market values used to determine the cost of operating assets acquired in a basket purchase?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Accounting concepts and applications

ISBN: 978-0538745482

11th Edition

Authors: Albrecht Stice, Stice Swain

See More Books

Question Posted: Dec 30, 2011 04:48 AM

See More Questions

Assets acquired in a basket purchase are to be allocated a portion of the total price based on their respective? a. Fair market values. b. Book values. c. Present values. d. Assessed values.
Why is it usually more difficult to determine the cost of lost sales for finished goods than it is for raw materials inventories?
Why is a time-weighting factor used to determine the number of shares that is used in the calculation of basic earnings per share?
How is a statement of cash flows different from an income statement?
On January 31, a snowstorm damaged the office of a small business, and some of the accounting information stored in the computer's memory was lost. The following information pertaining to January...
Fill in each blank so that the resulting statement is true. f/g (x) =_______ . provided_________ 0
What values of (if any) seem reasonable?
Revisit Exercise 4-14 about Drew Corp. If you have not already completed that exercise, do so before answering the following questions. Required a. Calculate under- or overapplied overhead for the...
List any public projects that failed due to unknown project risks? How did the project team try to address it? Provide details to answer the question.
Richard chooses technique 0 and 2 requiring 10+10-20 efforts and provising 10+11=21 benefits. Hence, 21 is returned as the output Example 2: input1: 3 input2: (10,10,10,10) input3: (10,11,12,15)...
A company that borrows money to construct its own building generally should include the interest paid on the loan during the construction period in the cost of the building. Why?
Companies usually depreciate assets like buildings even though those assets may be increasing in value. Why?
What seems to be the process by which the President of the United States makes decision on major issues?
Plains Wars United States history
Kelly, Incorporated, was issued a charter on January 15. 2003, that authorized the following capital stock: Common stock, no-par, 100,000 shares. Preferred stock, 7 percent, par value $10 per share....
Gopher, Inc. developing its upcoming budgeted Costs of Quality (COQ) with the following information: Expense Item Budget Raw Materials Inspection $ 15,000 EPA Fine 200,000 Design Engineering 15,000...
Ionization energies usually increase on going from left to right across the periodic table. The ionization energy for oxygen, however, is lower than that of either nitrogen or fluorine. Explain this...
a. Describe the importance of the level of activity on the unit cost of goods produced by a manufacturer. b. Allocation of overhead costs requires certain assumptions. Explain and illustrate cost...
Explain the major objective(s) of LIFO inventory accounting. Discuss the consequences of using LIFO in both measurement of income and the valuation of inventories for the analysis of financial...
Discuss current disclosures for inventory valuation methods and describe how these disclosures are useful in our analysis. Identify additional types of inventory disclosures that would be useful for...
A section 83(b) election creates ordinary income at the time of the grant. Ture or False
You are thinking of buying a stock priced at $99 per share. Assume that the risk-free rate is about 4.5% and the market risk premium is 6.4%. If you think the stock will rise to $125 per share by the...
The transactions in this practice set were completed by Hydro Paddle Boards, Inc. during January, the first month of the companys fiscal year. Hydro Paddle Boards, Inc. is a manufacturing corporation...

Why are fair market values used to determine the cost of operating assets acquired in a basket

Question:

Step by Step Answer:

The fair market values of the assets acquired are considered the best ...View the full answer

Accounting concepts and applications

Students also viewed these Accounting questions