Salem Co Had the Following Account Balances as of December 1

question 27

Essay

Salem Co. had the following account balances as of December 1, 2010: Bellington Inc. transferred $1.7 million in cash and 12,000 shares of its newly issued $30 par value common stock (valued at $90 per share) to acquire all of Salem's outstanding common stock.
Assume that Bellington paid cash of $2.8 million. No stock is issued. An additional $50,000 is paid in direct combination costs.
Required:
For Goodwill, determine what balance would be included in a December 1, 2010 consolidation.

---

Definitions:

Volleyball Set

In the context of sports, it refers to a group of plays or the equipment used in the game of volleyball, but as a financial term, it's NO.

Markup Percentage

The percentage added to the cost price of goods to cover overhead and profit.

Dollar Amount

a numerical value representing a sum of money.

Direct Material

Raw materials that are directly traceable to the manufacturing of a product and are an integral part of the finished product.