Question
On February 5, Pryor Corporation paid $1,600,000 for all the issued and outstanding common stock of Shaw, Inc., in a transaction properly accounted for as
On February 5, Pryor Corporation paid $1,600,000 for all the issued and outstanding common stock of Shaw, Inc., in a transaction properly accounted for as an acquisition. The book values and fair values of Shaw's assets and liabilities on February 5 were as follows
Book Value Fair Value
Cash $ 160,000 $ 160,000
Receivables (net) 180,000 180,000
Inventory 315,000 300,000
Plant and equipment (net) 820,000 920,000
Liabilities (350,000) (350,000)
Net assets $1,125,000 $1,210,000
What is the amount of goodwill resulting from the business combination?
| a. | $475,000. | |
| b. | $85,000. | |
| c. | $390,000. | |
| d. | $-0-. |
Assume that on January 1, 2010, P Company acquired 80% (8,000 shares) of the stock of S Company for $148,000. What is the implied book value of the company?
| a. | 185,000 | |
| b. | 118,400 | |
| c. | 148,000 | |
| d. | 225,000 |
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2001 Miller Local Government Audits
Authors: Rhett D. Harrell
1st Edition
015607219X, 978-0156072199
