ADVANCED ACCOUNTING-LL
13th Edition
ISBN: 9781260232486
Author: Hoyle
Publisher: MCGRAW-HILL CUSTOM PUBLISHING
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Chapter 4, Problem 10P
To determine
Identify the appropriate answer for the given statement from the given choices.
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Amie, Inc., has 100,000 shares of $2 par value stock outstanding. Prairie Corporation acquired 30,000 of Amie’s shares on January 1, 2015, for $120,000 when Amie’s net assets had a total fair value of $350,000. On July 1, 2018, Prairie bought an additional 60,000 shares of Amie from a single stockholder for $6 per share. Although Amie’s shares were selling in the $5 range around July 1, 2018, Prairie forecasted that obtaining control of Amie would produce significant revenue synergies to justify the premium price paid. If Amie’s identifiable net assets had a fair value of $500,000 at July 1, 2018, how much goodwill should Prairie report in its postcombination consolidated balance sheet?a. $60,000b. $90,000c. $100,000d. $–0–
Lea Inc, owned 900,000 shares of Mia Corporation stock. On December 31, 2010, when Lea's account "Investment in Common Stock of Mia Corporation" has a carrying value of P5 per share, Lea distributed these shares to its stockholders as a dividend. Lea originally paid P8 for each share. Lea has 300,000 shares issued and outstanding, which are traded on a national stock exchange. The quoted market price for a Mia share was P7 on the declaration date and P9 on distribution date.
What would be the reduction in Lea's stockholder's equity as a result of the above transactions?
Group of answer choices
A. P3,600,000
B. P7,200,000
C. P2,100,000
D.P4,500,000
Choose the correct. Amie, Inc., has 100,000 shares of $2 par value stock outstanding. Prairie Corporation acquired 30,000 of Amie’s shares on January 1, 2015, for $120,000 when Amie’s net assets had a total fair value of $350,000. On July 1, 2018, Prairie bought an additional 60,000 shares of Amie from a single stockholder for $6 per share. Although Amie’s shares were selling in the $5 range around July 1, 2018, Prairie forecasted that obtaining control of Amie would produce significant revenue synergies to justify the premium price paid. If Amie’s identifiable net assets had a fair value of $500,000 at July 1, 2018, how much goodwill should Prairie report in its postcombination consolidated balance sheet?a. $60,000b. $90,000c. $100,000d. $–0–
Chapter 4 Solutions
ADVANCED ACCOUNTING-LL
Ch. 4 - Prob. 1QCh. 4 - Atwater Company acquires 80 percent of the...Ch. 4 - What is a control premium and how does it affect...Ch. 4 - Prob. 4QCh. 4 - How is the noncontrolling interest in a subsidiary...Ch. 4 - Prob. 6QCh. 4 - Prob. 7QCh. 4 - Prob. 8QCh. 4 - Prob. 9QCh. 4 - Prob. 10Q
Ch. 4 - Prob. 1PCh. 4 - Prob. 2PCh. 4 - Prob. 3PCh. 4 - Prob. 4PCh. 4 - Prob. 5PCh. 4 - Prob. 6PCh. 4 - Prob. 7PCh. 4 - Assuming that Pride, in its internal records,...Ch. 4 - Prob. 9PCh. 4 - Prob. 10PCh. 4 - Prob. 11PCh. 4 - Prob. 12PCh. 4 - Prob. 13PCh. 4 - Prob. 14PCh. 4 - Prob. 15PCh. 4 - Prob. 16PCh. 4 - Prob. 17PCh. 4 - Prob. 18PCh. 4 - Current liabilities: a. 50,000 b. 46,000 c. 40,000...Ch. 4 - Prob. 20PCh. 4 - Stockholders equity: a. 80,000 b. 90,000 c. 95,000...Ch. 4 - Prob. 22PCh. 4 - Prob. 23PCh. 4 - Prob. 24PCh. 4 - Prob. 25PCh. 4 - Prob. 26PCh. 4 - Prob. 27PCh. 4 - Prob. 28PCh. 4 - Prob. 29PCh. 4 - Prob. 30PCh. 4 - Prob. 31PCh. 4 - Prob. 32PCh. 4 - Prob. 33PCh. 4 - Prob. 34PCh. 4 - Prob. 35PCh. 4 - Prob. 36PCh. 4 - Prob. 37PCh. 4 - Prob. 38PCh. 4 - Prob. 39PCh. 4 - Prob. 40PCh. 4 - Prob. 41PCh. 4 - Prob. 42PCh. 4 - Prob. 43PCh. 4 - Prob. 44PCh. 4 - Prob. 1DYSCh. 4 - Prob. 2DYSCh. 4 - Costco Wholesale Corporation owns and operates...
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