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

question 56

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 consolidated goodwill at the date of the combination.

• A)$360.
• B)$450.
• C)$460.
• D)$440.
• E)$475.

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Definitions:

365-Day Year

A conventional method used in finance that assumes all years have 365 days for the purpose of interest calculation.

Exact Simple Interest

Interest calculated precisely on the principal amount, without compounding, for a specific time period.

365-Day Year

A reference to a full calendar year consisting of 365 days, typically excluding leap years which have 366 days.

Exact Simple Interest Rate

The percentage of the principal amount (the initial sum of money borrowed or invested) that is paid as interest for a specified period, not accounting for compound interest.