Question
Acquirer Company buys Target Company. Target's pre-acquisition balance sheet at historical cost showed Total Assets at $730,000 and Total Liabilities at $420,000. Upon acquisition, Acquirer
Acquirer Company buys Target Company. Target's pre-acquisition balance sheet at historical cost showed Total Assets at $730,000 and Total Liabilities at $420,000. Upon acquisition, Acquirer revalued Target's identifiable assets at $1,285,000 and liabilities at $675,000. Assume the purchase price accounting identified the Goodwill is associated with the acquisition at $350,000. How much did acquirer pay for Target? (i.e. what was the purchase price?)
a. $ 350,000 b. $ 405,000 c. $ 660,000 d. $ 960,000 e. $ 1,215,000
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