Presented Below Are the Financial Balances for the Boxwood Company

question 54

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 equipment immediately following the acquisition.

• A)$400.
• B)$660.
• C)$1,060.
• D)$1,040.
• E)$1,050.

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Definitions:

Implicit Group Metafavoritism

The unconscious bias towards favoring one's own group, influencing group dynamics and perceptions.

Prototype

An initial model or early sample of a product used to test and refine the concept or design before final production and release.

Central Tendencies

Statistical measures that summarize the center or typical value of a dataset, including mean, median, and mode.

Cultural Variations

Differences in the practices, traditions, and norms observed among various cultures.