The Financial Statement Amounts for the Atwood Company and the Franz

question 121

Multiple Choice

The financial statement amounts for the Atwood Company and the Franz Company as of December 31, 2021, are presented below. Also included are the fair values for Franz Company's net assets (all numbers are in thousands) . Note: Parenthesis indicate a credit balanceAssume an acquisition business combination took place at December 31, 2021. Atwood issued 50 shares of its common stock with a fair value of $35 per share for all of the outstanding common shares of Franz. Stock issuance costs of $15 (in thousands) and direct costs of $10 (in thousands) were paid.Compute the amount of the consideration transferred by Atwood to acquire Franz.

• A) $1,750.
• B) $1,760.
• C) $1,775.
• D) $1,300.
• E) $1,120.

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Definitions:

Marginal Cost Curve

A graphical representation showing how the cost of producing one more unit varies with the quantity produced.

Total Variable Costs

The sum of all costs that vary with the level of production, such as materials and labor, excluding fixed costs.

Units of Output

The total quantity of goods or services produced by a firm or industry during a specific period.

Average Fixed Cost Curves

A graph representing the fixed costs of production (costs that do not change with the level of output) spread over varying levels of output, typically decreasing as output increases.