Question
On January 1, year 1, Alex Company issues 100,000 shares of its stock (which is valued at $20 per share) to acquire Nolan Company. The
On January 1, year 1, Alex Company issues 100,000 shares of its stock (which is valued at $20 per share)
to acquire Nolan Company. The purchase agreement also states that Alex will pay $200,000 in year 2 if
Nolan has net income of at least $400,000 in year 2. There is a 50% chance Nolan will meet or exceed
$400,000 of net income in year 2. How should Alex recognize this transaction?
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Laboratory Auditing For Quality And Regulatory Compliance
Authors: Donald C. Singer, Raluca-Ioana Stefan, Jacobus F. Van Staden
1st Edition
0367392461, 978-0367392468
