Goodwill equals the excess of the acquisition cost over the acquirer's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognized. Consequently goodwill is US $200.000$1,000,000 - $800,000).

Simulation is a technique for experimenting with logical and mathematical models using a computer. Because of the behavior of the many variables involved and the complexity of their interactions, many problems cannot be solved using simple algebraic formulas. The availability of computer spreadsheets makes the construction of simulation models a practical alternative for all entities.

The gross method accounts for receivables at their face amount. If a discount is taken a sales discount is recorded and classified as an offset to sales in the income statement to yield net sales. The net method records receivables net of the applicable discount. If the payment is not received during the discount period, an interest revenue account, such as sales discounts forfeited is credited at the end of the discount period or when the payment is received. Accordingly, the application of the net method requires a sales discount forfeited but not a sales discount account.

In its financial statements issued through December 31. Year 3, Company M has reported US $1.750.000$300,000 + $600,000 + $850,000) of income from long-term contracts. In its tax returns for the same period, it has reported US $1 .100000 $400,000 $700,000) of income from the same sources. The result is a taxable temporary difference. Thus, Company M expects to have future taxable amounts of US $650.000 and should recognize a deferred tax liability of US $162.500$650.000 x 25 f applicable tax rate).

The average collection period is the average time it takes to receive payment from customers because one-half of the customers will pay on day 10 and half will pay on day 30, the average collection period is 20 days [.5(10 days) + .5(30 days)]. An entity sells 10,000 skateboards a year at US $66 each. All sales are on credit, with terms of 3/10, net 30, which means three percent discount if payment is made within 10 days; otherwise full payment is due at the end of 30 days. One half of the customers are expected to take advantage of the discount and pay on day 10. The other half are expected to pay on day
30. Sales are expected to be uniform throughout the year for both types of customers.