Balance Sheet Information for Sphinx Company at January 1,2013,is Summarized

question 15

Essay

Balance sheet information for Sphinx Company at January 1,2013,is summarized as follows:
Sphinx's assets and liabilities are fairly valued except for plant assets that are undervalued by $50,000.On January 2,2013,Pyramid Corporation issues 20,000 shares of its $10 par value common stock for all of Sphinx's net assets and Sphinx is dissolved.Market quotations for the two stocks on this date are:
Pyramid pays the following fees and costs in connection with the combination:
Required:
1.Calculate Pyramid's investment cost of Sphinx Corporation.
2.Calculate any goodwill from the business combination.

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Definitions:

Low-Context Culture

A communication style where most of the information is explicitly stated in the message itself, relying less on the context or non-verbal cues.

Receptive Mind-Set

An attitude or readiness to receive new ideas or information without prejudice.

Time

A constant, quantifiable value through which occurrences are sequenced from the past, through the present, and into the future.

Productivity

The effectiveness of productive effort, typically measured in terms of the rate of output per unit of input.