Company P acquired 80% of the outstanding common stock of the Company S by issuing common stock with a market value of $550,000. The balance sheet of Company S was as follows on the acquisition date: Assets Cash Inventory Land Building (net) Total $50,000 $500,000 $ 50,000 $600,000 120,000 100,000 350,000 $620,000 Liabilities and Equity Liabilities Common stock, $10 par Other paid-in capital Retained earnings Total $120,000 100,000 150,000 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? 250,000 $620,000
Company P acquired 80% of the outstanding common stock of the Company S by issuing common stock with a market value of $550,000. The balance sheet of Company S was as follows on the acquisition date: Assets Cash Inventory Land Building (net) Total $50,000 $500,000 $ 50,000 $600,000 120,000 100,000 350,000 $620,000 Liabilities and Equity Liabilities Common stock, $10 par Other paid-in capital Retained earnings Total $120,000 100,000 150,000 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? 250,000 $620,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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D1.
Transcribed Image Text:Company P acquired 80% of the outstanding common stock of the Company S by issuing common
stock with a market value of $550,000. The balance sheet of Company S was as follows on the
acquisition date:
Assets
Cash
Inventory
Land
Building (net)
Total
$50,000
500
$500,000
$50,000
$600,000
120,000
100,000
350,000
$620,000
Liabilities and Equity
Liabilities
Common stock, $10 par
Other paid-in capital
Retained earnings
Total
$120,000
100,000
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?
150,000
250,000
$620,000
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