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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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