Bullen Inc. acquired 100% of the voting common stock of Vicker Inc. on January 1, 2018. The book value and fair value of Vicker'
s accounts on that date (prior to creating the combination) are as follows, along with the book value of Bullen's accounts:
Bullen Book Value Vicker Book Value Vicker Fair Value
Retained earnings, 1/1/20 $250,000 $240,000
Cash and receivables 170,000 70,000 $70,000
Inventory 230,000 170,000 210,000
Land 280,000 220,000 240,000
Buildings (net) 480,000 240,000 270,000
Equipment (net) 120,000 90,000 90,000
Liabilities 650,000 430,000 420,000
Common stock 360,000 80,000
Additional paid-in capital 20,000 40,000
Assume that Bullen issued 12,000 shares of common stock with a $5 par value and a $47 fair value for all of the outstanding shares of Vicker. What will be the consolidated Additional Paid-In Capital and Retained Earnings (January 1, 2018 balances) as a result of this acquisition transaction?
(A) $524,000 and $420,000.
(B) $60,000 and $250,000.
(C) $524,000 and $250,000.
(D) $60,000 and $490,000.
(E) $380,000 and $250,000.
Bullen Book Value Vicker Book Value Vicker Fair Value
Retained earnings, 1/1/20 $250,000 $240,000
Cash and receivables 170,000 70,000 $70,000
Inventory 230,000 170,000 210,000
Land 280,000 220,000 240,000
Buildings (net) 480,000 240,000 270,000
Equipment (net) 120,000 90,000 90,000
Liabilities 650,000 430,000 420,000
Common stock 360,000 80,000
Additional paid-in capital 20,000 40,000
Assume that Bullen issued 12,000 shares of common stock with a $5 par value and a $47 fair value for all of the outstanding shares of Vicker. What will be the consolidated Additional Paid-In Capital and Retained Earnings (January 1, 2018 balances) as a result of this acquisition transaction?
(A) $524,000 and $420,000.
(B) $60,000 and $250,000.
(C) $524,000 and $250,000.
(D) $60,000 and $490,000.
(E) $380,000 and $250,000.
1 answer:
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