The following data applies to Questions 1-4: In order to reduce the risk associa

Question

The following data applies to Questions 1-4: In order to reduce the risk associated with a new line of business, Conservative Corporation established Spin Company as a wholly owned subsidiary. It transferred assets and accounts payable to Spin in exchange for its common stock. Spin recorded the following entry when th transaction occurred: Cash and receivables Inventory Land Buikdings Equipment 23,000 15,000 30,000 100,000 95,000 Accounts Payable Accumulated Depreciation-Buildings 32,000 Accumulated Depreciation-Equipment 30,000 Common Stock Additional Paid-In Capital 20,000 56,000 125,000 1. Based on the preceding information, what number of shares of $7 par value stock did Spir issue to Conservative? A. 10,000 7,000 C.8,000 25,000 Learning Objective: 01-05 Topic: Combination Effected through Acquisition of Stock Difficulty: 2 Medium 2. Based on the preceding information, what was Conservative's book value of to Snin Company? assets trans

Explanation / Answer

1. ans c - 8000

2. not available (question not clear)

3. ans A - $ 181000

4. ans D - no change

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