Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Amie, Inc., has 175,000 shares of $1 par value stock outstanding. Prairie Corporation acquired 52,500 of Amie's shares on January 1, 2015, for $105,000 when
Amie, Inc., has 175,000 shares of $1 par value stock outstanding. Prairie Corporation acquired 52,500 of Amie's shares on January 1, 2015, for $105,000 when Amie's net assets had a total fair value of $405,350. On July 1, 2018, Prairie bought an additional 105,000 shares of Amie from a single stockholder for $4 per share. Although Amie's shares were selling in the $3 range around July 1, 2018, Prairie forecasted that obtaining control of Amie would produce significant revenue synergies to justify the premium price paid. If Amie's identifiable net assets had a fair value of $548,250 at July 1, 2018, how much goodwill should Prairie report in its postcombination consolidated balance sheet? Multiple Choice 0 $0 0 $52,500. $151,750. 0 $151,750. $81,750. 0 $81,750
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started