Judd Company issued nonvoting preferred stock with a fair value of $1,500,000 in
ID: 2497594 • Letter: J
Question
Judd Company issued nonvoting preferred stock with a fair value of $1,500,000 in exchange for all the outstanding common stock of the Bath Corporation. On the date of the exchange, Bath had tangible net assets with a book value of $900,000 and a fair value of $1,400,000. In addition, Judd issued preferred stock valued at $100,000 to an individual as a finder's fee for arranging the transaction. As a result of these transactions, Judd should report an increase in net assets of ____.
a.
$900,000
b.
$1,400,000
c.
$1,500,000
d.
$1,600,000
Explain.
a.
$900,000
b.
$1,400,000
c.
$1,500,000
d.
$1,600,000
Explanation / Answer
Answer is option is c-1,500,000
for increase in net asset here we can take only nonvoting preferred stock with a fair value of 1,500,000
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