Question

Select the correct answer THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 1 THROUGH 4. On, Dec., 20, 2013, A (the investee) was merged into B. B issued 80,000 shares of its $10 par and $22 FMV per share to A stockholders for all issued and outstanding shares. The direct costs $240,000. Prior to the merger A balance sheet was (6 POINTS) Assets Cost FMV Lia & Stockholders’ equity Cost FMV Current assets 500000 575,000 Long term liabilities 750000 750000 Plant assets 1,800,000 2,000,000 Common stocks, $1 par 500,000 Paid in capital 350,000 Retained Earnings 700,000 1– The stock investment account will be debited by -——— in the books of B. A $2,000,000​ C $1,040,000 B $1,760,000 D $2,200,000 2– The paid in capital account will increase by -——— in the books of B. A $720,000 C $1,200,000 B $960,000 D $800,000 3– The amount of goodwill is—————. A $2,000,000 C $175,000 B $1,825,000 D $800,000 4–Company A————— A Will be survived C Will be a subsidiary of B B Will go out from existence D A & B will go out from existence.

Answer 1

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