Press Company acquired 100% of the outstanding common stock of Stamp Company. Press gave 40,000 shares of its $1 par value common stock as consideration. Stamp's net assets have a book value of $800,000 and a current value of $850,000. (Press's common stock had a market value of $22 per share when the business combination occurred.)
Required:
Record the entries that would be made on each company's books as a result of this transaction.

Question

Quizplus · Accepted Answer

The Answer of Press Company acquired 100% of the outstanding common stock of Stamp Company. Press gave 40,000 shares of its $1 par value common stock as consideration. Stamp's net assets have a book value of $800,000 and a current value of $850,000. (Press's common stock had a market value of $22 per share when the business combination occurred.)
Required:
Record the entries that would be made on each company's books as a result of this transaction.

Press Company Acquired 100% of the Outstanding Common Stock of Stamp