The Financial Statements for Goodwin, Inc

question 75

Multiple Choice

The financial statements for Goodwin, Inc. and Corr Company for the year ended December 31, 2013, prior to Goodwin's acquisition business combination transaction regarding Corr, follow (in thousands) : On December 31, 2013, Goodwin issued $600 in debt and 30 shares of its $10 par value common stock to the owners of Corr to acquire all of the outstanding shares of that company. Goodwin shares had a fair value of $40 per share.
Goodwin paid $25 to a broker for arranging the transaction. Goodwin paid $35 in stock issuance costs. Corr's equipment was actually worth $1,400 but its buildings were only valued at $560.
In this acquisition business combination, what total amount of common stock and additional paid-in capital is added on Goodwin's books?

• A) $265.
• B) $1,165.
• C) $1,200.
• D) $1,235.
• E) $1,765.

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Definitions:

Inventory

The range of products or goods that are held by a business for the purpose of resale, crucial for operations and financial health.

Working Capital Assets

Current assets that are used in the operation of a business and can be converted into cash within a year.

Net Working Capital

The difference between a company's current assets and its current liabilities, indicating the short-term financial health and operational efficiency.

Spontaneous Financing

Financing that occurs naturally as a company operates, such as trade credit that increases as sales increase.