Gmaildocs.google.com @P Corporation issued 10,000 shares ofcommon stock with a fair value of $25per share for all the outstandingcommon stock of S Company in abusiness combination properlyaccounted for as an acquisition. Thefair value of S Company's net assets onthat date was $220,000. P Companyalso agreed to issue an additional2,000 shares of common stock with afair value of $50,000 to the formerstockholders of S Company as anearnings contingency. Assuming thatthe contingency is expected to be met,the $50,000 fair value of the additionalshares to be issued should be treatedas a(n) *decrease in other contributed capital.increase in gain on acquisitiondecrease in retained earnings.increase in goodwill.37...

IFRS 3 (2008) seeks to improve the coherence, reliability, and comparability of information provided…

Answered: O O O C O decrease in other contributed…

O O O C O decrease in other contributed capital O increase in gain on acquisition O decrease in retained earnings. O increase in goodwill.

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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Question

Gmail
docs.google.com @
P Corporation issued 10,000 shares of
common stock with a fair value of $25
per share for all the outstanding
common stock of S Company in a
business combination properly
accounted for as an acquisition. The
fair value of S Company's net assets on
that date was $220,000. P Company
also agreed to issue an additional
2,000 shares of common stock with a
fair value of $50,000 to the former
stockholders of S Company as an
earnings contingency. Assuming that
the contingency is expected to be met,
the $50,000 fair value of the additional
shares to be issued should be treated
as a(n) *
decrease in other contributed capital.
increase in gain on acquisition
decrease in retained earnings.
increase in goodwill.
37
...

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