Question: Par Company acquires 100 of the common stock of Sub

Par Company acquires 100% of the common stock of Sub Company for an agreed-upon price of $900,000. The book value of the net assets is $700,000, which includes $50,000 of subsidiary cash equivalents. Existing fixed assets have fair values greater than their recorded book values. How will this transaction affect the cash flow statement of the consolidated firm in the period of the purchase, if:
What will be the effect of the above acquisition on cash flow statements prepared in periods after the year of the purchase?

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  • CreatedApril 13, 2015
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