Judd Company issued nonvoting preferred stock with a fair value of P1,500,000 in exchange for all the outstanding common stock of the Bath Corporation. On the date of the exchange, Bath had tangible net assets with a book value of P900,000 and a fair value of P1,400,000. In addition, Judd issued preferred stock valued at P100,000 to an individual as a finder's fee for arranging the transaction.As a result of these transactions, Judd should report an increase in net assets of as a result of debiting the account "investment in Subsidiary":
Judd Company issued nonvoting preferred stock with a fair value of P1,500,000 in exchange for all the outstanding common stock of the Bath Corporation. On the date of the exchange, Bath had tangible net assets with a book value of P900,000 and a fair value of P1,400,000. In addition, Judd issued preferred stock valued at P100,000 to an individual as a finder's fee for arranging the transaction.As a result of these transactions, Judd should report an increase in net assets of as a result of debiting the account "investment in Subsidiary":
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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11. please help me to answer this with solution. thank you
Transcribed Image Text:Judd Company issued nonvoting preferred stock with a fair value of
P1,500,000 in exchange for all the outstanding common stock of the Bath
Corporation. On the date of the exchange, Bath had tangible net assets
with a book value of P900,000 and a fair value of P1,400,000. In addition,
Judd issued preferred stock valued at P100,000 to an individual as a finder's
fee for arranging the transaction.As a result of these transactions, Judd
should report an increase in net assets of as a result of debiting the account
"investment in Subsidiary":
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