Presented Below Are the Financial Balances for the Boxwood Company

question 87

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 goodwill immediately following the acquisition.

• A)$440.
• B)$442.
• C)$450.
• D)$455.
• E)$452.

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Definitions:

Separating Equilibrium

A situation in different types of market participants, each with their own unique characteristics, make distinct choices that reveal their type.

Klutzes

Individuals who are particularly clumsy or awkward, often ending up in minor accidents or mishaps due to their lack of coordination or grace.

Dull Lectures

Lectures or presentations that lack interest or excitement, often resulting in reduced audience engagement or attention.

Productivity

The efficiency with which inputs are converted into outputs.