Question: Abrams Company is a sole proprietorship The book value of
Abrams Company is a sole proprietorship. The book value of its identifiable net assets is $400,000, and the fair value of the same net assets is $600,000. It is agreed that the business is worth $850,000. What advantage might there be for the seller if the company is exchanged for the common stock of another corporation as opposed to receiving cash? Consider both the immediate and future impact.
Answer to relevant QuestionsMajor Corporation is acquiring Abrams Company by issuing its common stock in a nontaxable exchange. Major is issuing common stock with a fair value of $850,000 for net identifiable assets with book and fair values of ...Harms acquires Blake on January 1, 2011, for $1,000,000. The amount of $800,000 is assigned to identifiable net assets. Goodwill is being impairment tested on December 31, 2015. There have not been any prior impairment ...Avery Company acquires the net assets of Iowa Company on July 1, 2011. The net assets acquired include plant assets that are provisionally estimated to have a fair value of $600,000 with a 10-year usable life and no salvage ...Hanson Company issues 10,000 shares of $10 par common stock for the net assets of Marcus Incorporated on December 31, 2012. The stock has a fair value of $65 per share. Acquisition costs are $10,000, and the cost of issuing ...Heinrich Company, owned by Elennor and Al Heinrich, has been experiencing financial difficulty for the past several years. Both Elennor and Al have not been in good health and have decided to find a buyer. P&F International, ...
Post your question