Presented Below Are the Financial Balances for the Boxwood Company

question 22

Multiple Choice

Presented below are the financial balances for the Boxwood Company and the Tranz Company as of December 31, 2020, immediately before Boxwood acquired Tranz. Also included are the fair values for Tranz Company's net assets at that date (all amounts in thousands) . Note: Parenthesis indicate a credit balanceAssume a business combination took place at December 31, 2020. Boxwood issued 50 shares of its common stock with a fair value of $35 per share for all of the outstanding common shares of Tranz. Stock issuance costs of $15 (in thousands) and direct costs of $10 (in thousands) were paid to effect this acquisition transaction. To settle a difference of opinion regarding Tranz's fair value, Boxwood promises to pay an additional $5.2 (in thousands) to the former owners if Tranz's earnings exceed a certain sum during the next year. Given the probability of the required contingency payment and utilizing a 4% discount rate, the expected present value of the contingency is $5 (in thousands) .Compute consolidated revenues immediately following the acquisition.

• A) $3,540.
• B) $2,880.
• C) $1,170.
• D) $1,650.
• E) $4,050.

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Definitions:

Social Institutions

Established systems or structures within a society that govern the behavior and expectations of individuals, such as family, education, and government.

Raised In Isolation

The condition of being brought up in an environment that is significantly devoid of normal social interaction and exposure to the outside world.

Develop Normally

The process of growing or evolving according to expected patterns or stages of physical, mental, or emotional growth.

Total Institutions

are places of residence and work where large numbers of individuals are cut off from wider society for a considerable period, leading lives enclosed and regulated by the institution.