Question
ABC Company acquired all 60 million common shares of MSN Company on December 31, 2020. In the acquisition, ABC issued 39 million shares of ABC
ABC Company acquired all 60 million common shares of MSN Company on December 31, 2020. In the acquisition, ABC issued 39 million shares of ABC stock plus $30 cash for each share of MSN stock. ABC stock, which has a par value of $1 per share, had a market value of $25 per share. The estimated fair value of MSN accounts were as follows:
Cash and cash equivalents $ 100,000,000
Accountgs Receivable $ 150,000,000
Capitalized costs $ 210,000,000
Intangible assets $ 2,500,000,000
Accounts payable $ (215,000,000)
Other Liabilities $ (70,000,000)
Deferred income tax liability $(1,100,000,000)
Required:
- Calculate the total price paid for MSN. Is there goodwill or a gain on bargain purchases?
- Record the acquisition assuming MSN was dissolved
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