Question
Maxwell acquires 100 percent of the outstanding voting shares of Daisy Company on January 1, 2016. To obtain these shares, Maxwell pays $200,000 cash and
Maxwell acquires 100 percent of the outstanding voting shares of Daisy Company on January 1, 2016. To obtain these shares, Maxwell pays $200,000 cash and issues 6,000 shares of $5 par value common stock on this date. Maxwells stock had a fair value of $20 per share. Maxwell also pays an additional $4,000 in stock issuance costs. At date of acquisition, the book values and fair values of Daisy's net assets amounted to $230,000 and $265,000, respectively. What amount was reported for goodwill as a result of this acquisition?
Select one:
A. $51,000
B. $90,000
C. $-0-
D. $55,000
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