1. Pat Corporation paid $100,000 cash for the net assets of Sag Company, which consisted of the...

Question:

1. Pat Corporation paid $100,000 cash for the net assets of Sag Company, which consisted of the following:

Assume Sag Company is dissolved. The plant and equipment acquired in this business combination should be recorded at:a $220,000b $200,000c $183,332d $180,0002. On April 1, Par Company paid $1,600,000 for all the issued and outstanding common stock of Son Corporation in a transaction properly accounted for as an acquisition. Son Corporation is dissolved. The recorded assets and liabilities of Son Corporation on April 1 follow:Cash $160,000Inventory 480,000Property and equipment (net of accumulated depreciation of $640,000) 960,000Liabilities (360,000)On April 1, it was determined that the inventory of Son had a fair value of $380,000 and the property and equipment (net) had a fair value of $1,120,000. What is the amount of goodwill resulting from the acquisition?a 0b $100,000c $300,000d$360,000

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... 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... 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...