tricia corporation exchanged 40 000 previously unissued no par 257289

Tricia Corporation exchanged 40,000 previously unissued no par common shares for a 40 percent interest in Lisa Corporation on January 1, 2011. The assets and liabilities of Lisa on that date (after the exchange) were as follows (in thousands):



The direct cost of issuing the shares of stock was $20,000, and other direct costs of combination were $80,000.

REQUIRED

1. Assume that the January 1, 2011, market price for Tricia’s shares is $24 per share. Prepare a schedule to allocate the investment cost/book value differentials.

2. Assume that the January 1, 2011, market price for Tricia’s shares is $16 per share. Prepare a schedule to allocate the investment cost/book value differentials. Assume that other direct costs were$0.