Roscoe Company pays $318,000 to purchase all the outstanding common stock of Lia Corporation. At the date

Question:

Roscoe Company pays $318,000 to purchase all the outstanding of Lia Corporation. At the date of purchase, the net assets of Lia have a book value of $290,000. Roscoe's management allocates $20,000 of the excess cost to undervalued land on the books of Lia.
What should be done with the rest of the excess?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...