Business combinations, Pooling of interest

Allen Corporation initiated a plan to acquire all the voting stock of Lorenzo Glass Company on October 1, 2019. On this date Lorenzo Glass had 200,000 shares of common stock outstanding, 5,000 of which were held by Allen by Allen Corporation. Between October 1 and December 1 Allen Corporation acquired 4,000 additional shares of Lorenzo Glass and Lorenzo Glass acquired 5,000 shares of Allen Corporation and 10,000 shares of its own stock. These acquisitions were for cash considerations but were not contemplation of effecting the business combination. The business combination was consummated on December 1, with Allen Corporation issuing 1 share of Allen common for each 2 outstanding shares of Lorenzo Glass. 1. How many shares of Lorenzo Glass stock must be exchanged for common stock of Allen, the issuing corporation, in order for the combination to quality as a pooling of interests with respect to the exchange of shares? a. 200,000 shares c. 180,000 shares b. 190,000 shares d. 171,000 shares 2, How many shares of Lorenzo Glass stock will be considered to be exchanged for purposes of determining whether the combination meets the test for a pooling of interests? a. 190,000 shares c. 176,000 shares b. 178,500 shares d. 171,000 shares