1. Prior to being united in a business combination, Atkins, Inc., and Waterson Corporation hadthe following stockholders' equity figures:LO 2-5Atkins WatersonCommon stock ($1 par value) . . . . . . . $180,000 $ 45,000Additional paid-in capital . . . . . . . . . . . 90,000 20,000Retained earnings . . . . . . . . . . . . . . . . 300,000 110,000Atkins issues 51,000 new shares of its common stock valued at $3 per share for all of the outstandingstock of Waterson. Immediately afterward, what are consolidated Additional Paid-In Capital and Retained Earnings, respectively?

a. $104,000 and $300,000

.b. $110,000 and $410,000.

c. $192,000 and $300,000.

d. $212,000 and $410,000

2.Pat Corporation paid $100,000 cash for the net assets of Sag Company, which consisted of the following:Book ValueFair ValueCurrent assets$40,000$56,000Plant and equipment160,000220,000Liabilities assumed(40,000)(36,000)$160,000$240,000Assume Sag Company is dissolved. The plant and equipment acquired in this business combination should berecorded at:

a. $220,000

b. $200,000

c. $183,332

d. $180,000

3. Bullen Inc. acquired 100% of the voting common stock of Vicker Inc. on January 1, 2018. The book value and fair value of Vicker's accounts on that date (prior to creating the combination) are as follows, along with the book value of Bullen's accounts:

Bullen Book Value Vicker Book Value Vicker Fair Value

Retained earnings, 1/1/20 $160,000 $240,000

Cash and receivables 170,000 70,000 $70,000

Inventory 230,000 170,000 210,000

Land 280,000 220,000 240,000

Buildings (net) 480,000 240,000 270,000

Equipment (net) 120,000 90,000 90,000

Liabilities 650,000 430,000 420,000

Common stock 360,000 80,000

Additional paid-in capital 20,000 40,000

1) Assume that Bullen paid a total of $480,000 in cash for all of the shares of Vicker. In addition, Bullen paid $35,000 for secretarial and management time allocated to the acquisition transaction. What will be the balance in consolidated goodwill?

a. 0 b. 20 000 c. 35, 000 d. 55,000

2) Assume that Bullen issued 12,000 shares of common stock with a $5 par value and a $42 fair value for all of the outstanding stock of Vicker. What will be tje additional paid in capital and retained earnings after the combinations?

a. 20,000 and 160,000

B. 20000 and 260000

C. 380 000 and 160 000

D. 464,000 and 160000

E. 380000 and 260000

3. Assume that bullet issued 12,000 shares of common stock with a $5 par value and a $47 fair value to obtain all of vickers outsanding stock. In this transaction how much goodwill should be recognized?

A. 144000

B. 104000

C. 64000

D. 60000

E. 0

4. Assume thet Bullet issued preffered stock with a par value of 240000 and fair value 50000 for all of the net assets of vicker in a business combination. What will be the balance in the inventory and land accounts after the business in good will?

A. 440000, 496000

B. 440000, 520000

C. 425000, 505000

D. 402000, 520000

E. 427000, 510000

4. P Corporation issued 10,000 shares of common stock with a fair value of $25 per share for all the outstanding common stock of S Company in a business combination properly accounted for as an acquisition. The fair value of S Company's net assets on that date was $220,000. P Company also agreed to issue an additional 2,000 shares of common stock with a fair value of $50,000 to the former stockholders of S Company as an earnings contingency. Assuming that the contingency is expected to be met, the $50,000 fair value of the additional shares to be issued should be treated as a(n)

a. decrease in noncurrent liabilities of S Company that were assumed by P Company.

b. decrease in consolidated retained earnings.

c. increase in consolidated goodwill.

d. decrease in consolidated other contributed capital

5. P Co. issued 5,000 shares of its common stock, valued at $200,000, to the former shareholders of S Company two years after S Company was acquired in an all-stock transaction. The additional shares were issued because P Company agreed to issue additional shares of common stock if the average post combination earnings over the next two years exceeded $500,000. P Company will treat the issuance of the additional shares as a (decrease in)

a.consolidated retained earnings.

b.consolidated goodwill.

c.consolidated paid-in capital.

d.non-current liabilities of S Company assumed by P Company

5. Among the concepts or principles in Corporate Governance, which is the most important concept that each corporate governing body must have? Explain why.