Examlex

Solved

Carnes Has the Following Account Balances as of May 1

question 43

Multiple Choice

Carnes has the following account balances as of May 1, 2012 before an acquisition transaction takes place.  Inventory $100,000 Land 400,000 Buildings (net)  500,000 Common stock ($10 par)  600,000 Additional paid-in capital 200,000 Retained Earnings 200,000 Revenues 450,000 Expenses 250,000\begin{array}{lr}\text { Inventory } & \$ 100,000 \\\text { Land } & 400,000 \\\text { Buildings (net) } & 500,000 \\\text { Common stock (\$10 par) } & 600,000 \\\text { Additional paid-in capital } & 200,000 \\\text { Retained Earnings } & 200,000 \\\text { Revenues } & 450,000 \\\text { Expenses } & 250,000\end{array} The fair value of Carnes' Land and Buildings are $650,000 and $550,000, respectively. On May 1, 2012, Riley Company issues 30,000 shares of its $10 par value ($25 fair value) common stock in exchange for all of the shares of Carnes' common stock. Riley paid $10,000 for costs to issue the new shares of stock. Before the acquisition, Riley has $700,000 in its common stock account and $300,000 in its additional paid-in capital account. What will be Riley's balance in its common stock account as a result of this acquisition?


Definitions:

Malaria

A serious and sometimes life-threatening disease caused by parasites transmitted to humans through the bites of infected mosquitoes.

Cancer

A disease characterized by the uncontrolled division of abnormal cells in a part of the body.

Strokes

Medical conditions that occur when the blood supply to part of the brain is interrupted or reduced, preventing brain tissue from getting oxygen and nutrients, causing cells to die.

Type A Personality

A personality trait characterized by high levels of competitiveness, self-driven ambition, impatience, and a constant sense of urgency.

Related Questions