Company P acquired 80% of the outstanding common stock of the Company S by issuing common stock with a market value of $550,000. The balance sheet of Company S was as follows on the acquisition date: Assets Cash Inventory Land Building (net) Total $50,000 $500,000 $ 50,000 $600,000 120,000 100,000 350,000 $620,000 Liabilities and Equity Liabilities Common stock, $10 par Other paid-in capital Retained earnings Total $120,000 100,000 150,000 The market values were as follows: Inventory, $130,000; Land, $120,000; Building, $400,000. What is the amount that will appear as Cash Provided (Used) by Investing Activities on the consolidated statement of cash flows, as a result of this purchase? 250,000 $620,000

Company P acquired 80% of the outstanding common stock of the Company S by issuing common stock with a market value of $550,000. The balance sheet of Company S was as follows on the acquisition date: Assets Cash Inventory Land Building (net) Total $50,000 $500,000 $ 50,000 $600,000 120,000 100,000 350,000 $620,000 Liabilities and Equity Liabilities Common stock, $10 par Other paid-in capital Retained earnings Total $120,000 100,000 150,000 The market values were as follows: Inventory, $130,000; Land, $120,000; Building, $400,000. What is the amount that will appear as Cash Provided (Used) by Investing Activities on the consolidated statement of cash flows, as a result of this purchase? 250,000 $620,000

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 1BCRQ

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