Determine the purchase price atwhich P Co. would record a $20,000gain. *$685,000$690,000$670,000$665,000None of the options is correct P Company wishes to acquire S Co.for cash in an asset acquisition, andappraisals reveal that the inventoryhas a fair value $185,000, and theequipment has a current value of$645,000. The book value and fairvalue of liabilities are the same. Thefollowing balance sheets werereported on January 1, 2011, for PCompany and S Company:P Co.$ 150,000Sco.$ 30,000CashInventoryEquipment (net)450,000150,000570,000$750,0001,320,000Total$1,920,000$ 450,000$150,000Total liabilitiesCommon stock, $20 par valueOther contributed capitalRetained earnings600,000300,000375,000105,000495,000195,000$1,920,000$750,000Total

Purchase price = Net assets taken over - Required gain

Answered: purchase price

Business

Accounting

purchase price

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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