In which one of the following cases will a non-cash asset transferred as consideration in a business combination be measured at carrying value , not at fair value ?
Question 3
On January 1 , 200x Ritt Corp . purchased 80 % of Shaw Corp .' s $ 10 par common stock for $ 975,000 . On this date , the carrying amount of Shaw ' s net assets was $ 1,000,000 . The fair values of Shaw ' s identifiable assets and liabilities were the same as their carrying amounts except for plant assets ( net ) which were $ 100,000 in excess of the carrying amount . On that date , the fair value of the 20 % noncontrolling interest in Shaw was appropriately determined to be $ 200,000 . For the year ended December 31 , 200x , Shaw had net income of $ 190,000 and paid cash dividends totaling $ 125,000 . In the January 1 , 200x consolidated balance sheet , goodwill should be reported at
Question 4
On December 31 , 1988 , Saxe Corporation was merged into Poe Corporation . In the business combination , Poe issued 200,000 shares of its $ 10 par common stock , with a market price of $ 18 a share , for all of Saxe ' s common stock . The stockholders ' equity section of each company ' s balance sheet immediately before the combination was : Assume that the merger is accounted for using the acquisition method of accounting . December 31 , 1988 additional paid-in capital should be reported at
Question 5