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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Tricia Corporation exchanged 40,000 previously unissued no par common shares for a 40 percent interest in Lisa Corporation on January 1, 2011. The assets and liabilities of Lisa on that date (after the exchange) were as follows (in thousands):
The direct cost of issuing the shares of stock was $20,000, and other direct costs of combination were $80,000.
REQUIRED
1. Assume that the January 1, 2011, market price for Tricia’s shares is $24 per share. Prepare a schedule to allocate the investment cost/book value differentials.
2. Assume that the January 1, 2011, market price for Tricia’s shares is $16 per share. Prepare a schedule to allocate the investment cost/book value differentials. Assume that other direct costs were$0.
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