rotterdam corporation s pre tax accounting income of 725 000 for the year 2014 inclu 4373842

Rotterdam Corporation’s pre-tax accounting income of $725,000 for the year 2014 included the following items: Amortization of identifiable intangibles ………. $147,000 Depreciation of building …………… 115,000 Loss from discontinued operations ………. 44,000 Unusual, non-recurring gains …………. 152,000 Profit-sharing payments to employees ……….. 65,000 Ewing Industries Ltd. would like to purchase Rotterdam Corporation. In trying to measure Rotterdam’s normalized earnings for 2014, Ewing determines that the building’s fair value is triple the book value and that its remaining economic life is double the life that Rotterdam is using. Ewing would continue the profit-sharing payments to employees, with the payments being based on income from continuing operations before amortization and depreciation. Instructions Calculate the 2014 normalized earnings amount of Rotterdam Corporation that Ewing would use to calculate goodwill. View Solution:
Rotterdam Corporation s pre tax accounting income of 725 000 for the year

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