Use the following facts for Multiple Choice problems 28 and 29: Assume on January 1, 2022, the investor company issued 10,000 new shares of the investor company's com- mon stock in exchange for all of the individually identifiable assets and liabilities of the investee company. The investee company qualifies as a business. Fair value approximates book value for all of the investee's identifiable net assets. The transaction resulted in no goodwill or bargain purchase gain. The following financial statement information is for an investor company and an investee company on January 1, 2022 prepared immediately before this transaction. Receivables & inventories Land. Property & equipment... Total assets... Liabilities... Common stock ($1 par) Additional paid-in capital.. Retained earnings.... Total liabilities & equity. Net Assets 28. Asset acquisition (fair value equals book value) What is the per share fair value of the investor's common stock? a. $19.60/share b. $28.00/share . c. $42.00/share d. $58.80/share a. $588,000 b. $420,000 Book Values Investor Investee $112,000 $ 56,000 224,000 112,000 252,000 112,000 $588,000 $280,000 $168,000 $ 84,000 22,400 11,200 308,000 135,800 89,600 49,000 $588,000 $280,000 $420,000 $196,000 29. Asset acquisition (fair value equals book value) Provide the investor company's balance (i.e., on the investor's books, before consolidation) for an "In- vestment in Investee" account immediately following the acquisition of the investee's net assets: c. $196,000 d. $147,000
Use the following facts for Multiple Choice problems 28 and 29: Assume on January 1, 2022, the investor company issued 10,000 new shares of the investor company's com- mon stock in exchange for all of the individually identifiable assets and liabilities of the investee company. The investee company qualifies as a business. Fair value approximates book value for all of the investee's identifiable net assets. The transaction resulted in no goodwill or bargain purchase gain. The following financial statement information is for an investor company and an investee company on January 1, 2022 prepared immediately before this transaction. Receivables & inventories Land. Property & equipment... Total assets... Liabilities... Common stock ($1 par) Additional paid-in capital.. Retained earnings.... Total liabilities & equity. Net Assets 28. Asset acquisition (fair value equals book value) What is the per share fair value of the investor's common stock? a. $19.60/share b. $28.00/share . c. $42.00/share d. $58.80/share a. $588,000 b. $420,000 Book Values Investor Investee $112,000 $ 56,000 224,000 112,000 252,000 112,000 $588,000 $280,000 $168,000 $ 84,000 22,400 11,200 308,000 135,800 89,600 49,000 $588,000 $280,000 $420,000 $196,000 29. Asset acquisition (fair value equals book value) Provide the investor company's balance (i.e., on the investor's books, before consolidation) for an "In- vestment in Investee" account immediately following the acquisition of the investee's net assets: c. $196,000 d. $147,000
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 8RE
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Transcribed Image Text:Use the following facts for Multiple Choice problems 28 and 29:
Assume on January 1, 2022, the investor company issued 10,000 new shares of the investor company's com-
mon stock in exchange for all of the individually identifiable assets and liabilities of the investee company.
The investee company qualifies as a business. Fair value approximates book value for all of the investee's
identifiable net assets. The transaction resulted in no goodwill or bargain purchase gain. The following
financial statement information is for an investor company and an investee company on January 1, 2022,
prepared immediately before this transaction.
Receivables & inventories
Land.
Property & equipment...
Total assets....
Liabilities...
Common stock ($1 par)
Additional paid-in capital.
Retained earnings.
Total liabilities & equity.
Net Assets
****
28. Asset acquisition (fair value equals book value)
What is the per share fair value of the investor's common stock?
. c. $42.00/share
d.
$58.80/share
a. $19.60/share
b. $28.00/share
a. $588,000
b. $420,000
Book Values
Investor Investee
$112,000 $ 56,000
224,000 112,000
252,000 112,000
$588,000 $280,000
c. $196,000
d.
$147,000
$168,000
22,400
308,000 135,800
89,600
49,000
$588,000 $280,000
$420,000 $196,000
29. Asset acquisition (fair value equals book value)
Provide the investor company's balance (i.e., on the investor's books, before consolidation) for an "In-
vestment in Investee" account immediately following the acquisition of the investee's net assets:
$ 84,000
11,200
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