Price Company issued 8,740 shares of its $20 par value common stock for the net assets of Sims Company in a business combination under which Sims Company will be merged into Price Company. On the date of the combination, Price Company common stock had a fair value of $30 per share. Balance sheets for Price Company and Sims Company immediately prior to the combination were: Price Sims Current assets $460,540 $61,810 Plant and equipment (net) 529,190 140,940 Total $989,730 $202,750 Liabilities $274,100 $53,300 Common stock, $20 par value 558,200 88,000 Other contributed capital 72,870 20,750 Retained earnings 84,560 40,700 Total $989,730 $202,750 (a) If the business combination is treated as a purchase and Sims Company’s net assets have a fair value of $209,574, Price Company’s balance sheet immediately after the combination will include goodwill of $54,226. $52,626. $51,626. $60,226.
Price Company issued 8,740 shares of its $20 par value common stock for the net assets of Sims Company in a business combination under which Sims Company will be merged into Price Company. On the date of the combination, Price Company common stock had a fair value of $30 per share. Balance sheets for Price Company and Sims Company immediately prior to the combination were: Price Sims Current assets $460,540 $61,810 Plant and equipment (net) 529,190 140,940 Total $989,730 $202,750 Liabilities $274,100 $53,300 Common stock, $20 par value 558,200 88,000 Other contributed capital 72,870 20,750 Retained earnings 84,560 40,700 Total $989,730 $202,750 (a) If the business combination is treated as a purchase and Sims Company’s net assets have a fair value of $209,574, Price Company’s balance sheet immediately after the combination will include goodwill of $54,226. $52,626. $51,626. $60,226.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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