Bullen Inc. acquired 100% of the voting common stock of Vicker Inc. on January 1, 2018. The book value and fair value of Vicker's accounts on that date (prior to creating the combination) are as follows, along with the book value of Bullen's accounts:Bullen Book Value Vicker Book Value Vicker Fair Value
Retained earnings, 1/1/20 $250,000 $240,000
Cash and receivables 170,000 70,000 $70,000
Inventory 230,000 170,000 210,000
Land 280,000 220,000 240,000
Buildings (net) 480,000 240,000 270,000
Equipment (net) 120,000 90,000 90,000
Liabilities 650,000 430,000 420,000
Common stock 360,000 80,000
Additional paid-in capital 20,000 40,000

Assume that Bullen issued 12,000 shares of common stock with a $5 par value and a $47 fair value for all of the outstanding shares of Vicker. What will be the consolidated Additional Paid-In Capital and Retained Earnings (January 1, 2018 balances) as a result of this acquisition transaction?

(A) $524,000 and $420,000.
(B) $60,000 and $250,000.
(C) $524,000 and $250,000.
(D) $60,000 and $490,000.
(E) $380,000 and $250,000.


Answer 1


The answer is (c)$524,000 and $250,000...the explanation is attached below


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Tidy Limited purchased a new van on January 1, 2018. The van cost $40,000. It has an estimated life of ten years and the estimated residual value is $3,500. Tidy uses the double-declining-balance method to compute depreciation. What is the adjusted balance in the Accumulated Depreciation account at the end of 2019





The computation is shown below:

But first we have to determined the following things

Depreciation rate

= 1 ÷ useful life

= 1 ÷ 10

= 0.1

It is double-declining so the rate is also double i.e. 0.20

Now in the first year, the depreciation expense is

= $40,000 × 0.20

= $8,000

Now in the second year, the depreciation is

= ($40,000 - $8,000) × 0.20

= $25,600

So, the accumulated depreciation at the end of 2019 is

= $8,000 + $25,600

= $33,600

Here the residual value is not relevant. hence, ignored it

Consider a fast food café of your choice. Apply 4 V’s of Operation. Describe each V as ‘High’, ‘Low’ or ‘Moderate’ with one liner reason.



4 V's of Operation

The 4 V's of operation are Volume, Variety, Variation, and Visibility.  Let us take Mrs. Happy Food Cafe with over 100 outlets in Fiacton Town, as an example to illustrate the 4 V's of operation.

Volume: As a food cafe, the volume of production that will be required for some foods and drinks is so high that their provision requires repetitive tasks.  Based on this, procedures are normally standardized in order to achieve low cost for foods and drinks.  However, it is harder to standardize services, since personal touches are added by the servers based on their individual perceptions and abilities.

Variety: Mrs. Happy Food Cafe tries to bring some variety in her offerings to satisfy the various needs of her customers.  While variety is naturally low in the Food Cafe sector, some cafes like Mrs. Happy Good Cafe, try to satisfy customers' demands by varying the foods with Continental, African, Latino cuisines and dishes.

Variation: At Mrs Happy Food cafes, the food and drinks do not vary much as customers expect to be served the same quality of services at any of their cafes.  This is because the processes are standardized to achieve low cost.  So, the variation is moderate.

Visibility: Customers of Mrs Happy Food cafes are not able to see and track their experiences of the the processes for the food preparation that they order.   But, they can track the processes for the services because services are consumed as they are offered.  So, visibility is 'Moderate," as it is divided between the hard goods and the soft goods.  With respect to goods visibility is 'Low.'  However, with respect to the services the customers' visibility of processes is high.


The 4 V's of operation describe the different characteristics of the processes that various entities use to transform their inputs into outputs of goods and services.  They may be high, low, or moderate.  They include, volume, variety, variation, and visibility.

The following transactions occur for Cardinal Music Academy during the month of October: Provide music lessons to students for $17,000 cash. Purchase prepaid insurance to protect musical equipment over the next year for $4,200 cash. Purchase musical equipment for $20,000 cash. Obtain a loan from a bank by signing a note for $30,000.Record the transactions. The company uses the following accounts: Cash, Prepaid Insurance, Equipment, Notes Payable, and Service Revenue.


A purchase is generally defined as the buying of goods and services on the price decided by the seller of goods.

What is term Transactions about?

A transactions is defined as the record or an agreement between the buyer and seller of the goods or services.

1. Cash                                 $17,000

       To Service revenue (music)            $17,000

(The academy receives cash by providing music services)

2. Prepaid Insurance          $4,200

               To Cash                                 $4,200

(The academy paid cash in advance to purchase insurance policy)

3. Musical Equipment           $20,000

             To  Cash                                    $20,000

(The academy paid cash for acquiring musical equipment)

4. Cash                              $30,000

           To  Notes payable                           $30,000

(The academy borrowed cash by signing a notes from the bank)

Learn more about Transactions, refer to the link:



See explanation section


1. Debit     Cash                   $17,000

Credit            Service revenue (music)       $17,000

Note: The academy receives cash by providing music services to the students.

2. Debit     Prepaid Insurance          $4,200

Credit                    Cash                                 $4,200

Note: The academy paid cash in advance to purchase insurance policy.

3. Debit    Musical Equipment           $20,000

Credit                     Cash                                    $20,000

Note: The academy paid cash for acquiring musical equipment.

4. Debit     Cash                              $30,000

Credit             Notes payable                           $30,000

Note: The academy borrowed cash by signing a notes from the bank.

Revise the following wordy, unorganized paragraphs. Include an introductory statement followed by a bulleted or numbered list. Look for ways to eliminate unnecessary wording.Because all casual clothing is not suitable for the office, these guidelines will help you determine what is appropriate to wear to work. Slacks that are similar to Dockers and other makers of cotton or synthetic material pants, wool pants, flannel pants, and attractive dress synthetic pants are acceptable. Casual dresses and skirts hemmed at the knee and lower or slits at or below the knee are acceptable. Dress and skirt length should be at a length at which you can sit comfortably in public. Casual shirts and blouses, dress shirts and blouses, sweaters, tops, golf-type shirts, tunics, and turtlenecks are acceptable attire for work. Most suit jackets or sport jackets are also acceptable attire for the office. Conservative athletic or walking shoes, loafers, clogs, sneakers, boots, flats, dress heels, and leather deck-type shoes are acceptable for work.



Revision of wordy, unorganized paragraphs

Our organization's dress code allows suitable office dresses.  Find below the guidelines for allowed dresses:

  • Slacks similar to Dockers
  • Casual dresses and skirts hemmed at the lower knee
  • Comfortable dress and skirt length
  • Casual shirts and blouses are acceptable
  • Suit and sport jackets
  • Conservative athletic or walking shoes


The use of bulleted or numbered lists can help to organize wordy paragraphs.  They also eliminate some of the unnecessary wordings that have been included, thereby reducing the overall length.

Kaplan, Inc. produces flash drives for computers, which it sells for $27 each. The variable cost to make each flash drive is $13. During April, 700 drives were sold. Fixed costs for April were $2 per unit for a total of $1,400 for the month. How much is the monthly break-even level of sales in dollars for Kaplan?



Contribution per unit

= Selling price - Variable cost per unit

 = $27 -$13

= $14

Contribution margin ratio

= Contribution per unit

  selling price

= $14


=  0.518518518

Break-even point in dollars

= $1,400


= $2,700



Break-even point in dollars  equals fixed cost divided by contribution margin ratio. Contribution margin ratio is equal to contribution per unit divided by selling price. Contribution per unit is selling price minus variable cost per unit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

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