Maxwell acquires 100 percent of the outstanding voting shares of Daisy Company on January 1,...
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Maxwell acquires 100 percent of the outstanding voting shares of Daisy Company on January 1, 2016. To obtain these shares, Maxwell pays $200,000 cash and issues 6,000 shares of $5 par value common stock on this date. Maxwells stock had a fair value of $20 per share. Maxwell also pays an additional $4,000 in stock issuance costs. At date of acquisition, the book values and fair values of Daisy's net assets amounted to $230,000 and $265,000, respectively. How much additional paid-in capital was recorded as a result of the combination? Please show solutions.
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