FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Elyon acquires 100 percent of the outstanding voting shares of Macek Company on January 1, 2021. To obtain these
shares, Flynn pays $400 cash (in thousands) and issues 10,000 shares of $20 par value common stock on this date.
Flynn's stock had a fair value of $36 per share on that date. Flynn also pays $15 (in thousands) to a local investment firm
for arranging the acquisition. An additional $10 (in thousands) was paid by Flynn in stock issuance costs.
The book values for both Flynn and Macek immediately preceding the acquisition follow. The fair value of each of Flynn
and Macek accounts is also included. In addition, Macek holds a fully amortized trademark that still retains a $40 (in
thousands) value. The figures below are in thousands. Any related question also is in thousands.
Macek Company
Flynn,
Вook
Fair
Inc
Value
Value
Cash
24
900
$ 80
$ 80
Receivables
480
180
160
Inventory
Land
660
260
300
300
120
130
Buildings (net)
1,200
220
280
Equipment
Accounts payable
360
100
75
480
60
60
Long-term liabilities
1,140
340
300
Common stock
1,000
200
80
Additional paid-in capital
Retained earnings
1,080
480
What amount will be reported for goodwill as a result of this acquisition?
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Transcribed Image Text:Elyon acquires 100 percent of the outstanding voting shares of Macek Company on January 1, 2021. To obtain these shares, Flynn pays $400 cash (in thousands) and issues 10,000 shares of $20 par value common stock on this date. Flynn's stock had a fair value of $36 per share on that date. Flynn also pays $15 (in thousands) to a local investment firm for arranging the acquisition. An additional $10 (in thousands) was paid by Flynn in stock issuance costs. The book values for both Flynn and Macek immediately preceding the acquisition follow. The fair value of each of Flynn and Macek accounts is also included. In addition, Macek holds a fully amortized trademark that still retains a $40 (in thousands) value. The figures below are in thousands. Any related question also is in thousands. Macek Company Flynn, Вook Fair Inc Value Value Cash 24 900 $ 80 $ 80 Receivables 480 180 160 Inventory Land 660 260 300 300 120 130 Buildings (net) 1,200 220 280 Equipment Accounts payable 360 100 75 480 60 60 Long-term liabilities 1,140 340 300 Common stock 1,000 200 80 Additional paid-in capital Retained earnings 1,080 480 What amount will be reported for goodwill as a result of this acquisition?
$30,000.
$65,000.
$200,000.
$175,000.
$55,000.
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Transcribed Image Text:$30,000. $65,000. $200,000. $175,000. $55,000.
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