Prior to being united in a business combination, Botkins Inc. and Volkerson Corp. had the following stockholders' equity figures: Botkins issued 56,000 new shares of its common stock valued at $3.25 per share for all of the outstanding stock of Volkerson.
Assume that Botkins acquired Volkerson on January 1, 2012. At what amount did Botkins record the investment in Volkerson?
A) $56,000.
B) $182,000.
C) $209,000.
D) $261,000.
E) $312,000.

Question

Prior to being united in a business combination, Botkins Inc. and Volkerson Corp. had the following stockholders' equity figures:  Botkins issued 56,000 new shares of its common stock valued at $3.25 per share for all of the outstanding stock of Volkerson.
Assume that Botkins acquired Volkerson on January 1, 2012. At what amount did Botkins record the investment in Volkerson?
A) $56,000. 
B) $182,000. 
C) $209,000. 
D) $261,000. 
E) $312,000.

Quizplus · Accepted Answer

$3.25 × 56,000 = $182,000

Prior to Being United in a Business Combination, Botkins Inc