Multiple Choice Queistons
1. Now assume the acquisition cost to PR is $60,000 (not the right answer). Other facts are the same as originally reported. Goodwill reported on this acquisition is
a. $35,600
b. $35,800
c. $44,400
d. $49,400
2. Now assume PR paid $8,000 in cash for SX's net assets. There are no consultant fees, and no shares are issued. Assume that SX's previously unrecorded intangible assets, capitalizable per GAAP, have a fair value
of $500. PR records a bargain gain of
a. $ 0
b. $3,100
c. $3,600
d. $4,100
Use the following information to answer questions l - 7 below. All amounts are in thousands.
PR Company pays $10,000 in cash and issues no-par stock with a fair value of $40,000 to acquire all of SX Corporation's net assets. SX's balance sheet at the date of acquisition is as follows:

PR's consultants find these items that are not reported on SX's balance sheet:
Fair value
Potential contracts with new customers $8,000
Advanced production technology 4,000
Future cost savings 2,000
Customer lists 1,000
Outside consultants are paid $200 in cash, and registration fees to issue PR's new stock are $400. All questions below relate to the entry or entries PR makes to record the acquisition on its books.

SX Corporation Book value Fair value 4,200 6,000 14,000 Current assets... 10,000 4,000 Total assets. RROARAA..WE $16,000 $2,000 11,600 12,000 5,000 8,000 (1,000) (9,600 Capital stock... Accumulated other comprehensive income. .