THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 5 THROUGH 10.

On October 30, 2013 Y corporation issued 100000 shares of its no-par, no stated-value common stock [current fair value $12 a share] for 18800 shares of the 20000 outstanding shares $20 par common stock of X company. The $150000 out-of-pocket costs of the business combination paid by Y on October 30, 2013, were as follows, $90000 directly related to the business combination; and $60000 indirect costs. Prior to the business combination, separate balance sheets of the constituent companies were as follows:

Assets

Y

X

Lia & Stockholders equity

Y

X

Cash

200000

100000

Current liabilities

800000

400000

A/R

400000

200000

Long term debts

0

100000

inventory

600000

300000

Common stocks no par

1200000

Plant assets

1300000

1000000

common stocks, $20 par

400000

Retained Earnings

500000

700000

total

2500000

1600000

total

2500000

1600000

Current fair values of X's identifiable net assets differed their carrying amounts as follows: Inventories $340000, Plant assets 1100000

Required: select the correct answer

5 The cash account of Y after business combination is --------

A

$200,000

C

$150,000

B

$50,000

D

$70,000.

6 The stock investment account in the balance sheet of Y is --------

A

$1,2,000,000

C

$1,290,000

B

$1,260,000

D

1,250,000.

7 After business combination. The value of common stock in Y balance sheet is----

A

$2,400,000

C

$2,490,000

B

$1,200,000

D

$2,340,000

8business combination goodwill is----

A

$124,400 positive goodwill

C

$74400 positive goodwill

B

$124,400 negative goodwill

D

$74400 negative goodwill

9The minority interest is----

A

$124,400

C

$150,000

B

$74400

D

124,600.

10 The value of consolidated inventory is

A

$900,000

C

$940000

B

$$860,000

D

$960000.

11 Occurs when a new corporation is formed to take over the assets and operations of two or more separate business entities and dissolves the previously separate entities

A- Legal consolidation

B- Legal merger

C- Acquisition

D- Trading securities