Hoyt Corporation Agreed to the Following Terms in Order to Acquire

question 5

Multiple Choice

Hoyt Corporation agreed to the following terms in order to acquire the net assets of Brown Company on January 1, 2011: (1.) To issue 400 shares of common stock ($10 par) with a fair value of $45 per share.
(2) ) To assume Brown's liabilities which have a fair value of $1,500.
On the date of acquisition, the consideration transferred for Hoyt's acquisition of Brown would be

• A) $18,000.
• B) $16,500.
• C) $20,000.
• D) $18,500.
• E) $19,500.

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Definitions:

Operating Departments

The divisions or units within an organization directly involved in its core business operations, where the main activities for generating revenue take place.

Computer Workstations

High-performance computers designed for technical or scientific applications, often used in professional environments for tasks that require significant processing power.

Step-Down Method

An allocation method used in accounting to distribute overhead costs among different departments or cost centers, starting with the department that provides the highest level of service to others.

Service Department

A division within a company that focuses on providing services rather than producing tangible goods.