Question
On March 1, 2020 Ajax Corporation acquired all the assets and liabilities of Chelsea Corporation by issuing shares of its common stock. The following is
On March 1, 2020 Ajax Corporation acquired all the assets and liabilities of Chelsea Corporation by issuing shares of its common stock. The following is a balance sheet data for the companies prior to the business combination and immediately following the combination:
| Ajax Corporation | Chelsea Corporation | Combined |
Cash | $ 75,000 | $ 35,000 | $ 110,000 |
Accounts receivable | 92,000 | 30,000 | 122,000 |
Inventory | 45,000 | 43,000 | 98,000 |
Equipment (net) | 420,000 | 150,000 | 620,000 |
Goodwill |
|
| XXX |
Total Assets | $ 632,000 | $ 258,000 | XXX |
Accounts payable | $ 375,000 | $ 125,000 | $ 500,000 |
Common stock, $2 par | 120,000 | 40,000 | 200,000 |
Additional paid-in capital | 85,000 | 30,000 | 245,000 |
Retained earnings | 52,000 | 63,000 | XXX |
Total Liabilities & Equity | $ 632,000 | $ 258,000 | XXX |
What number of shares did Ajax issue for this acquisition?
Select one:
a. 40,000 shares
b. 60,000 shares
c. 100,000 shares
d. 80,000 shares
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