Company P acquired 80% of the outstanding common stock of the Company S by isuing common stock with a market value of $550,000 The balance sheet of Company S was as followon the acquisition date:AssetsLiabilities and EquityCash$ 50,000Liabilities$120,000Inventory120,000Common stock, $10 par100,000Other paid-in capital150,000250,000Land100,000Building (net)350,000Retained earningsTotal$620,000Total$620,000The market values were as follows. Inventory, $130,000; Land, $120,000, Building, $400,000.What is the amount that will appear as Cash Provided (Used) by Investing Activities on the consolidated statement of cash flows, as a result of this purchase?O $600,000O $500,000O $50,000O SO

Cashflow is prepared to track how well company is generating cash, paying its debt obligations and…

Answered: Company P ac on the acquisiti Assets…

Company P ac on the acquisiti Assets Cash Inventory Land Building (ne Total The market valu What is the amo O $600,000 O $500,000 O 550,000 O SO

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Company P acquired 80% of the outstanding common stock of the Company S by isuing common stock with a market value of $550,000 The balance sheet of Company S was as follow
on the acquisition date:
Assets
Liabilities and Equity
Cash
$ 50,000
Liabilities
$120,000
Inventory
120,000
Common stock, $10 par
100,000
Other paid-in capital
150,000
250,000
Land
100,000
Building (net)
350,000
Retained earnings
Total
$620,000
Total
$620,000
The market values were as follows. Inventory, $130,000; Land, $120,000, Building, $400,000.
What is the amount that will appear as Cash Provided (Used) by Investing Activities on the consolidated statement of cash flows, as a result of this purchase?
O $600,000
O $500,000
O $50,000
O SO

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