Amie, Inc., has 100,000 shares of $2 par value stock outstanding. Prairie Corporation acquired 30,000 of Amie's

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Amie, Inc., has 100,000 shares of $2 stock outstanding. Prairie acquired 30,000 of Amie's shares on January 1, 2015, for $120,000 when Amie's net assets had a total fair value of $350,000. On July 1, 2018, Prairie bought 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, 2018, Prairie forecasted that obtaining control of Amie would produce significant revenue synergies to justify the premium price paid. If Amie's identifiable net assets had a fair value of $500,000 at July 1, 2018, how much should Prairie report in its post combination consolidated balance sheet?
a. $60,000
b. $90,000
c. $100,000
d. $-0-
Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...

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Fundamentals of Advanced Accounting

ISBN: 978-1259722639

7th edition

Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik

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Question Posted: Jul 14, 2017 10:21 AM

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Amie, Inc., has 100,000 shares of $2 par value stock outstanding. Prairie Corporation acquired 30,000 of Amie's

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Fundamentals of Advanced Accounting

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