On, Dec., 20, 2013, A (the investee) was merged into B. B issued 80,000 shares of its
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On, Dec., 20, 2013, A (the investee) was merged into B. B issued 80,000 shares of its $10 par and $22 FMV per share to A stockholders for all issued and outstanding shares. The direct costs $240,000. Prior to the merger A balance sheet was (6 POINTS) Assets Cost FMV Lia & Stockholders’ equity Cost FMV
Current assets 500000 575,000
Long term liabilities 750000 750000
Plant assets 1,800,000 2,000,000
Common stocks, $1 par 500,000
Paid in capital 350,000
Retained Earnings 700,000
1– The stock investment account will be debited by -——— in the books of B.
A $2,000,000
B $1,760,000
C $1,040,000
D $2,200,000
2– The paid in capital account will increase by -——— in the books of B.
A $720,000
B $960,000
C $1,200,000
D $800,000
3– The amount of goodwill is—————.
A $2,000,000
C $175,000
B $1,825,000
D $800,000
4–Company A—————
A Will be survived
B Will go out from existence
C Will be a subsidiary of B
D A & B will go out from existence.
Related Book For
Fundamental accounting principle
ISBN: 978-0078025587
21st edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
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