On January 1, 20X1, the Moody Company Entered into a Transaction

question 99

Multiple Choice

On January 1, 20X1, the Moody Company entered into a transaction for 100% of the outstanding common stock of Osorio Company. To acquire these shares, Moody issued $400 in long-term liabilities and 40 shares of common stock having a par value of $1 per share but a fair value of $10 per share. Moody paid $20 to lawyers, accountants, and brokers for assistance in bringing about this acquisition. Another $15 was paid in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows:

Note: Parentheses indicate a credit balance.
In Moody's appraisal of Osorio, three assets were deemed to be undervalued on the subsidiary's books: Inventory by $10, Land by $40, and Buildings by $60.
Compute the amount of consolidated additional paid-in capital at date of acquisition.

• A) $1,080.
• B) $1,420.
• C) $1,065.
• D) $1,425.
• E) $1,440.

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Definitions:

Humanistic Therapy

A psychological treatment approach focusing on individual potential and emphasizing empathy and the good in human behavior.

Stress Inoculation Training

A psychotherapy method that helps individuals cope with stress by preparing them in advance to manage potential stressors.

Anxiety-producing Situations

Scenarios or circumstances that trigger feelings of anxiety, fear, or apprehension, varying widely among individuals based on personal experiences and sensitivities.

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A form of psychotherapy that addresses maladaptive thinking patterns to effect change in behavior and emotion, often used in treating depression and anxiety.