Question
Glen Co. acquires 100 percent of the outstanding voting shares of Nutley Company on January 1, 2021. To obtain these shares, Glen pays $400 cash
Glen Co. acquires 100 percent of the outstanding voting shares of Nutley Company on January 1, 2021. To obtain these shares, Glen pays $400 cash (in thousands) and issues 10,000 shares of $20 par value common stock on this date. Glen's stock had a fair value of $36 per share on that date. Glen also pays $15 (in thousands) to a local investment firm for arranging the acquisition. An additional $10 (in thousands) was paid by Glen in stock issuance costs. The book values for both Glen and Nutley immediately preceding the acquisition follow. The fair value of each of Glen and Nutley accounts is also included. In addition, Nutley holds a fully amortized trademark that still retains a $40 (in thousands) value. The figures below are in thousands. Any related question also is in thousands.
Glen Co. acquires 100 percent of the outstanding voting shares of Nutley Company on January 1, 2021. To obtain these shares, Glen pays $400 cash (in thousands) and issues 10,000 shares of $20 par value common stock on this date. Glen's stock had a fair value of $36 per share on that date. Glen also pays $15 (in thousands) to a local investment firm for arranging the acquisition. An additional $10 (in thousands) was paid by Glen in stock issuance costs. The book values for both Glen and Nutley immediately preceding the acquisition follow. The fair value of each of Glen and Nutley accounts is also included. In addition, Nutley holds a fully amortized trademark that still retains a $40 (in thousands) value. The figures below are in thousands. Any related question also is in thousands. GLEN CO. CASH RECEIVABLES INVENTORY LAND BUILDINGS (NET) EQUIPMENT ACCOUNTS PAYABLE LONG-TERM LIABILITIES COMMON STOCK ADDITIONAL PAID-IN CAPITAL RETAINED EARNINGS 900 480 660 300 1,200 360 480 1,140 1,000 200 1,080 NUTLEY COMPANY Book Fair Value Value $ 80 $ 80 180 160 260 300 120 130 220 280 100 75 60 60 340 300 80 0 480 1) What amount will be reported for goodwill as a result of this acquisition? 2) What amount will be reported for consolidated additional paid-in capital? 3) What amount will be reported for consolidated cash after the acquisition is completedStep by Step Solution
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