On March 1, 2023, Forrest Inc. issued 50,000 voting common shares in return for all the common shares of Mountain Corporation. At that time, Forrest's shares were trading at $19 per share. After the transaction, the original shareholder group of Forrest retained control. Below is information related to Mountain Corporation
On March 1, 2023, Forrest Inc. issued 50,000 voting common shares in return for all the common shares of Mountain Corporation. At that time, Forrest's shares were trading at $19 per share. After the transaction, the original shareholder group of Forrest retained control. Below is information related to Mountain Corporation
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![On March 1, 2023, Forrest Inc. issued 50,000 voting common shares in return for all the common shares of Mountain
Corporation. At that time, Forrest's shares were trading at $19 per share. After the transaction, the original shareholder
group of Forrest retained control. Below is information related to Mountain Corporation:
4
Canying value
Fair value
$ 75,000
$ 75,000
150,000
125,000
275,000
315,000
550,000
650,000
$1,150,000
$1.065.000
Cash
Accounts receivable
Inventory
Property, plant, and equipment (net)
Total assets
Current liabilities
Long-term debt
Common shares
Retained earning
$275,000
Total habilities and shareholders' equity
$1,150,000
What amount of goodwill would be recorded in the consolidated statement of financial position as a result of this
acquisition?
$105,000
$265,000
$ 115,000
275,000
150,000
610,000
$115,000
$115,000
275,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcb6117a0-75b4-4432-9d67-32f0c54d9830%2F68226d58-85b5-4be2-9703-e5e8a9189634%2Fk58zz2a_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On March 1, 2023, Forrest Inc. issued 50,000 voting common shares in return for all the common shares of Mountain
Corporation. At that time, Forrest's shares were trading at $19 per share. After the transaction, the original shareholder
group of Forrest retained control. Below is information related to Mountain Corporation:
4
Canying value
Fair value
$ 75,000
$ 75,000
150,000
125,000
275,000
315,000
550,000
650,000
$1,150,000
$1.065.000
Cash
Accounts receivable
Inventory
Property, plant, and equipment (net)
Total assets
Current liabilities
Long-term debt
Common shares
Retained earning
$275,000
Total habilities and shareholders' equity
$1,150,000
What amount of goodwill would be recorded in the consolidated statement of financial position as a result of this
acquisition?
$105,000
$265,000
$ 115,000
275,000
150,000
610,000
$115,000
$115,000
275,000
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