REFERENCE: Ref.02_08 Flynn Acquires 100 Percent of the Outstanding Voting Shares of Shares

question 104

Multiple Choice

REFERENCE: Ref.02_08
Flynn acquires 100 percent of the outstanding voting shares of Macek Company on January 1,20X1.To obtain these shares,Flynn pays $400 (in thousands) and issues 10,000 shares of $20 par value common stock on this date.Flynn's stock had a fair value of $36 per share on that date.Flynn also pays $15 (in thousands) to a local investment firm for arranging the transaction.An additional $10 (in thousands) was paid by Flynn in stock issuance costs.
The book values for both Flynn and Macek as of January 1,20X1 follow.The fair value of each of Flynn and Macek accounts is also included.In addition,Macek holds a fully amortized trademark that still retains a $40 (in thousands) value.The figures below are in thousands.Any related question also is in thousands.
SHAPE \* MERGEFORMAT

-What amount will be reported for consolidated cash after the purchase transaction?

• A)$900.
• B)$875.
• C)$955.
• D)$980.
• E)$555.

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Definitions:

Producers

Individuals or businesses involved in the creation of goods and services for sale in the market.

Market Structure

The organizational and other characteristics of a market that influence the nature of competition and pricing.

Oligopolistic Industry

A market structure dominated by a small number of large firms, leading to limited competition and potentially higher prices for consumers.

Coca-Cola

A carbonated soft drink brand that is recognized worldwide, known for its secret formula and wide range of flavors.