Question: Garwood Corporation acquired 75 percent of Zorn Company s voting common

Garwood Corporation acquired 75 percent of Zorn Company's voting common stock on January 1, 20X4. At the time of acquisition, Zorn reported buildings and equipment at book value of $240,000; however, an appraisal indicated a fair value of $290,000.

Required
If consolidated statements are prepared, determine the amount at which buildings and equipment will be reported using the following consolidation alternatives:
a. Entity theory.
b. Parent company theory.
c. Proprietary theory.
d. Current accounting practice.


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  • CreatedMay 23, 2014
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