QUESTION 1 Use the following fact pattern for questions 1 and 2 - Phillips Company acquires all of the outstanding stock of Sylvania Company by issuing 20,000 shares of its own $5 par value stock. The market value of its stock at the date of issuance was $50 a share. Also, in conjunction with the acquisition Phillips incurred the following costs: $8,000 in finders fees, $12,000 in legal fees and $10,000 in stock issuance fees. What is the purchase price for this acquisition used to determine whether goodwill is present or not? 1. $1,000,000 $1,009,000 $1,029,000 $1,020,000 None of the above QUESTION 2 Use the following fact pattern for questions 1 and 2 - Phillips Company acquires all of the outstanding stock of Sylvania Company by issuing 20,000 shares of its own $5 par value stock. The market value of its stock at the date of issuance was $50 a share. Also, in conjunction with the acquisition Phillips incurred the following costs: $8,000 in finders fees, $12,000 in legal fees and $10,000 in stock issuance fees. What amount of paid in capital will be recorded for the issuance of the new shares? 1. $0 $890,000 $900,000 $1,000,000 None of the above
QUESTION 1 Use the following fact pattern for questions 1 and 2 - Phillips Company acquires all of the outstanding stock of Sylvania Company by issuing 20,000 shares of its own $5 par value stock. The market value of its stock at the date of issuance was $50 a share. Also, in conjunction with the acquisition Phillips incurred the following costs: $8,000 in finders fees, $12,000 in legal fees and $10,000 in stock issuance fees. What is the purchase price for this acquisition used to determine whether goodwill is present or not? 1. $1,000,000 $1,009,000 $1,029,000 $1,020,000 None of the above QUESTION 2 Use the following fact pattern for questions 1 and 2 - Phillips Company acquires all of the outstanding stock of Sylvania Company by issuing 20,000 shares of its own $5 par value stock. The market value of its stock at the date of issuance was $50 a share. Also, in conjunction with the acquisition Phillips incurred the following costs: $8,000 in finders fees, $12,000 in legal fees and $10,000 in stock issuance fees. What amount of paid in capital will be recorded for the issuance of the new shares? 1. $0 $890,000 $900,000 $1,000,000 None of the above
Chapter8: Consolidated Tax Returns
Section: Chapter Questions
Problem 36P
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![QUESTION 1 Use the following fact pattern for questions 1 and 2 - Phillips Company acquires all of the outstanding
stock of Sylvania Company by issuing 20,000 shares of its own $5 par value stock. The market value of its stock at the
date of issuance was $50 a share. Also, in conjunction with the acquisition Phillips incurred the following costs: $8,000 in
finders fees, $12,000 in legal fees and $10,000 in stock issuance fees. What is the purchase price for this acquisition
used to determine whether goodwill is present or not? 1. $1,000,000 $1,009,000 $1,029,000 $1,020,000 None of the
above QUESTION 2 Use the following fact pattern for questions 1 and 2 - Phillips Company acquires all of the
outstanding stock of Sylvania Company by issuing 20,000 shares of its own $5 par value stock. The market value of its
stock at the date of issuance was $50 a share. Also, in conjunction with the acquisition Phillips incurred the following
costs: $8,000 in finders fees, $12,000 in legal fees and $10,000 in stock issuance fees. What amount of paid in capital
will be recorded for the issuance of the new shares? 1. $0 $890,000 $900,000 $1,000,000 None of the above](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa9606a5e-05f9-4a9e-890d-65600c959df2%2F593f3f5a-641a-4b22-871a-93599c3179ab%2F44iy6b9_processed.jpeg&w=3840&q=75)
Transcribed Image Text:QUESTION 1 Use the following fact pattern for questions 1 and 2 - Phillips Company acquires all of the outstanding
stock of Sylvania Company by issuing 20,000 shares of its own $5 par value stock. The market value of its stock at the
date of issuance was $50 a share. Also, in conjunction with the acquisition Phillips incurred the following costs: $8,000 in
finders fees, $12,000 in legal fees and $10,000 in stock issuance fees. What is the purchase price for this acquisition
used to determine whether goodwill is present or not? 1. $1,000,000 $1,009,000 $1,029,000 $1,020,000 None of the
above QUESTION 2 Use the following fact pattern for questions 1 and 2 - Phillips Company acquires all of the
outstanding stock of Sylvania Company by issuing 20,000 shares of its own $5 par value stock. The market value of its
stock at the date of issuance was $50 a share. Also, in conjunction with the acquisition Phillips incurred the following
costs: $8,000 in finders fees, $12,000 in legal fees and $10,000 in stock issuance fees. What amount of paid in capital
will be recorded for the issuance of the new shares? 1. $0 $890,000 $900,000 $1,000,000 None of the above
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