Snowflake, Corp. Penguin, Inc. acquires 100% of the outstanding shares of Snowflake Corp. for $2,250,000 and accounts for the transaction using the purchase method. Snowflake's balance sheet at the acquisition date is as follows:
Based on the information concerning Snowflake Corp. what is the market value of the company's shareholders' equity at the acquisition date?

Question

Snowflake, Corp. Penguin, Inc. acquires 100% of the outstanding shares of Snowflake Corp. for $2,250,000 and accounts for the transaction using the purchase method. Snowflake's balance sheet at the acquisition date is as follows:
 Based on the information concerning Snowflake Corp. what is the market value of the company's shareholders' equity at the acquisition date?

Quizplus · Accepted Answer

The market value of the company's shareholders' equity at the acquisition date is equal to the purchase price of $2,250,000 as stated in the question. Therefore, the correct answer is C.