Carnes Has the Following Account Balances as of May 1

question 83

Multiple Choice

Carnes has the following account balances as of May 1, 2010 before an acquisition transaction takes place. The fair value of Carnes' Land and Buildings are $650,000 and $550,000, respectively. On May 1, 2010, Riley Company issues 30,000 shares of its $10 par value ($25 fair value) common stock in exchange for all of the shares of Carnes' common stock. Riley paid $10,000 for costs to issue the new shares of stock. Before the acquisition, Riley has $700,000 in its common stock account and $300,000 in its additional paid-in capital account. On May 1, 2010, what value is assigned to Riley's investment account?

• A) $150,000.
• B) $300,000.
• C) $750,000.
• D) $760,000.
• E) $1,350,000.

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Definitions:

Union Strategies

Tactics and plans employed by labor unions to improve worker conditions, wages, and benefits.

Increase Wages

The process of raising the amount of money paid to workers for their labor, often in response to inflation, increased living costs, or improved worker productivity.

Bilateral Monopoly

A market structure consisting of a single supplier and a single buyer.

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The result or consequence of economic policies and actions, measured in terms of growth, employment, inflation, and other macroeconomic variables.