Question: Amie Inc has 100 000 shares of 2 par value stock

Amie, Inc., has 100,000 shares of $2 par value stock outstanding. Prairie Corporation acquired 30,000 of Amie’s shares on January 1, 2009, for $120,000 when Amie’s net assets had a total fair value of $350,000. On July 1, 2012, Prairie agreed to buy an additional 60,000 shares of Amie from a single stockholder for $6 per share. Although Amie’s shares were selling in the $5 range around July 1, 2012, Prairie forecasted that obtaining control of Amie would produce significant revenue synergies to justify the premium price paid. If Amie’s net identifiable assets had a fair value of $500,000 at July 1, 2012, how much goodwill should Prairie report in its post-combination consolidated balance sheet?
a. $60,000.
b. $90,000.
c. $100,000.
d. $ -0-.

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  • CreatedOctober 04, 2014
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