1.
Please provide answer to the question below and why?
Question 3:
If the 100% stock acquisition of Sub Company by Parent Company was a bargain
purchase, what was the purchase price of Sub Company?
a) $650,000
b) $600,000
c) $550,000
d) None of the above
Solution
Fair value of net assets of sub = 650000 - 50000 = 600000
For making it a bargain purchase deal price pais must be lesser than 600,000, accordingly correct
option is:
c) $550,000