Essay
On 4/1/06, Peyco gave cash of $520,000 in exchange for 100% of the outstanding common stock of Seyco. On 4/1/06, Seyco had 50,000 outstanding shares of common stock having a book value of $9 per share. Additionally, the current value of Seyco's property, plant, and equipment on 4/1/06 was $110,000 more than its book value of $300,000.
Required:
a. Calculate the amount of goodwill or bargain purchase element existing in the transaction.
b. Determine the amount at which the property, plant, and equipment will be reported in consolidation.
Correct Answer:
Verified
Correct Answer:
Verified
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