Ask Question
20 March, 12:52

Catron Corporation is having liquidity problems, and as a result, it sells all of its outstanding stock to Lambert, Inc., for cash. Because of Catron's problems, Lambert is able to acquire this stock at less than the fair value of the company's net assets. How is this reduction in price accounted for within the consolidation process?

+2
Answers (1)
  1. 20 March, 13:10
    0
    The assets and liabilities acquired in a consolidation process are recorded at their fair market value. If the price paid during the consolidation process is lower than the fair market value of the assets - liabilities, then an ordinary gain on bargain purchase is recognized for the difference.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Catron Corporation is having liquidity problems, and as a result, it sells all of its outstanding stock to Lambert, Inc., for cash. Because ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers