Case # 5

On January 1, year 1, Angie Corporation issued 500,000 shares of its stock valued at $5 per share to acquire Nellie Corporation. The purchase agreement states that Angie Corporation will pay $300,000 in year 2 if Nellie Corporation has at least $450,000 of net income in year 2. There is a 50% chance that Nellie Corporation will meet or exceed $450,000 of net income in year 2. How should Angie Corporation recognize this transaction?

week 3 homework-

In a minimum of five to seven sentences, identify the key terms in your case, and state why you believe each is relevant to your case.