Bullen Inc Assume That Bullen Issued 12,000 Shares of Common Stock with Vicker

question 104

Multiple Choice

Bullen Inc. acquired 100% of the voting common stock of Vicker Inc. on January 1, 2013. The book value and fair value of Vicker's accounts on that date (prior to creating the combination) follow, along with the book value of Bullen's accounts: $\begin{array}{lrrr}&\text { Bullen } & \text { Vicker } & \text { Vicker } \\&\text { Book } & \text { Book } & \text { Fair } \\&\text { Value } & \text { Value } & \text { Value }\\\hline\text { Retained earnings, 1/1/15 } & \mathbf{\$ 2 5 0 , 0 0 0} & \mathbf{\$ 2 4 0 , 0 0 0} & \\\text { Cash and receivables } & 170,000 & 70,000 & \mathbf{\$ 7 0 , 0 0 0} \\\text { Inventory } & 230,000 & 170,000 & 210,000 \\\text { Land } & 280,000 & 220,000 & 240,000\\\text { Buildings (net) } & 480,000 & 240,000 & 270,000 \\\text { Equipment (net) } & 120,000 & 90,000 & 90,000 \\\text { Liabilities } & 650,000 & 430,000 & 420,000 \\\text { Common stock } & 360,000 & 80,000 & \\\text { Additional paid-in capital } & 20,000 & 40,000 &\end{array}$ Assume that Bullen issued 12,000 shares of common stock with a $5 par value and a $47 fair value to obtain all of Vicker's outstanding stock. In this acquisition transaction, how much goodwill should be recognized?

• A)$144,000.
• B)$104,000.
• C)$64,000.
• D)$60,000.
• E)$0.

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Definitions:

Supply Curve

A pictorial display indicating how the price of an item affects the quantity of the item sellers are eager to sell.

Cost of Production

The total expenses incurred in the manufacture of a product, including raw materials, labor, and overhead costs.

Quantity Demanded

Quantity demanded refers to the total amount of a good or service consumers are willing to purchase at a specific price point, at a given time.

Quantity Supplied

The total amount of a commodity that producers are willing and able to sell at a given price level, during a specific time period.