PR Company pays $15,000 in cash and issues no-par stock with a fair…

Question PR Company pays $15,000 in cash and issues no-par stock with a fair… PR Company pays $15,000 in cash and issues no-par stock with a fair value of $45,000 to acquire all of SXCorporation’s net assets. SX’s balance sheet at the date of acquisition is as follows:  SX Corporation Book valueFair valueCurrent assets$ 3,000$ 6,200Property, plant & equipment, net11,0008,000Identifiable intangible assets3,00016,000Total assets$17,000 Current liabilities$ 2,600$ 3,000Long-term debt13,00012,600Capital stock4,000 Retained earnings8,000 Accumulated other comprehensive income(1,000) Treasury stock(9,600) Total liabilities & equity$17,000  PR’s consultants find these items that are not reported on SX’s balance sheet:  Fair valuePotential contracts with new customers$ 8,500Advanced production technology4,500Future cost savings2,500Customer lists1,500 Outside consultants are paid $300 in cash, and registration fees to issue PR’s new stock are $500. The question below relates to the entry or entries PR makes to record the acquisition on its books.Three months after the acquisition, a fire damages SX’s equipment, reducing its fair value from $8,000 to $4,500. How does PR report this event? Ignore depreciation.   A. Loss of $3,500, reported on the income statementB. $3,500 increase in goodwillC. $3,500 decrease in goodwillD. Not reported Accounting Business Financial Accounting ACC 402A Share QuestionEmailCopy link Comments (0)