REFERENCE: Ref.02_06 The Financial Balances for the Atwood Company and the Franz

question 118

Multiple Choice

REFERENCE: Ref.02_06
The financial balances for the Atwood Company and the Franz Company as of December 31,20X1,are presented below.Also included are the fair values for Franz Company's net assets.
Note: Parenthesis indicate a credit balance
Assume a business combination took place at December 31,20X1.Atwood issued 50 shares of its common stock with a fair value of $35 per share for all of the outstanding common shares of Franz.Stock issuance costs of $15 (in thousands) and direct costs of $10 (in thousands) were paid.
-Assuming Atwood accounts for the combination as an acquisition,compute the investment to be recorded at date of acquisition.

• A)$1,760.
• B)$1,750.
• C)$1,775.
• D)$1,765.
• E)$1,120.

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Definitions:

Bribery and Fraud

Illegal practices involving the offering, giving, receiving, or soliciting of something of value for the purpose of influencing the actions of an individual in a position of trust.

Government Positions

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Bailey v. Drexel Furniture Company

A 1922 United States Supreme Court decision that ruled the Child Labor Tax Law of 1919 unconstitutional, which had imposed a tax on companies using child labor.

Child Labor

The employment of children in any work that deprives them of their childhood, interferes with their ability to attend regular school, and that is mentally, physically, socially or morally dangerous and harmful.