Question: On July 1 , 2 0 X 0 , DEF paid 5 0 0 in cash to UVW s shareholders in exchange for all of

On July 1,20X0, DEF paid 500 in cash to UVWs shareholders in exchange for all of UVWs shares. Immediately before the acquisition, UVWs: (1) identifiable assets had a carrying value of 100 and a fair value of 300 and (2) identifiable liabilities had a carrying value of 125 and a fair value of 125. What effect did the acquisition have on DEF Inc.s assets?
DEF Incs assets decreased by 500.
DEF Incs assets did not change.
DEF Incs assets increased by 125.
DEF Incs assets increased by 325.
DEF Incs assets increased by 625.

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