Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. as part of the acquisition agreement, parma corpor

As part of the acquisition agreement, Parma Corporation agrees to pay the former shareholders of...

90.2K

Verified Solution

Question

Accounting

As part of the acquisition agreement, Parma Corporation agrees to pay the former shareholders of Stow Company $0.50 in cash for every dollar of gross revenues above $5,500,000 reported at the end of the first year following acquisition. Parma projects the following gross revenues outcomes for the year: Gross revenues Probability $3,500,000 0.05 4,500,000 0.30 5,500,000 0.20 6,500,000 0.25 7,500,000 0.20 Using a 6 percent discount rate, what is the appropriate value to be reported as an earnings contingency liability on Parma's books at the date of acquisition?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Psychology
1.2K views

How does the war on terror change the way as Americans look at Domestic and National...

Physics
1.2K views

Wheel 2 has twice the radius of wheel 1 Each is accelerated from rest with...

Statistics
1.2K views

Dishonest people try to fake numbers in tax returns invoices or expense account laims It...

Calculus
1.2K views

Find the area between y 9 and y x 1 with x 0 a The...

Algebra
1.2K views

If we are told that x 1 x 7 0 then what can we infer...

Algebra
1.2K views

Which of the following is true about the data sets 101 131 134 109 152...

Algebra
1.2K views

Given that f x sinx g x cos x and h x tan x evaluate...

Accounting
1.2K views

Cullumber Tutoring Services provides study support and tutoring services for university students during their final...

Accounting
1.2K views

Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has...

Accounting
1.2K views

Find the financial statements of a publicly traded company and review its statement of cash...

Accounting
1.2K views

REQUIRED Prepare the Pro Forma Statement of Financial Position of Questor Enterprises as at 31...

Accounting
1.2K views

Bank reconcilation Dont know if pic is clear enough ...