On January 1, Year 5, Poor Co. acquired 80 percent of the outstanding common shares of Standard
Fantastic news! We've Found the answer you've been seeking!
Question:
On January 1, Year 5, Poor Co. acquired 80 percent of the outstanding common shares of Standard Inc. by paying cash of $275,000. The carrying amounts and fair values of both companies immediately before the acquisition were as follows:
Poor Co. | Poor Co. | Standard Inc. | Standard Inc. | |||||||||
Current assets | $ | 470,000 | $ | 485,000 | $ | 100,000 | $ | 120,000 | ||||
Plant assets | 2,879,000 | 3,200,000 | 175,000 | 250,000 | ||||||||
Intangibles | 45,000 | 50,000 | 50,000 | 75,000 | ||||||||
$ | 3,394,000 | $ | 325,000 | |||||||||
Current liabilities | $ | 367,000 | $ | 355,000 | $ | 125,000 | $ | 125,000 | ||||
Long-term debt | 1,462,000 | 1,460,000 | 50,000 | 40,000 | ||||||||
Common shares | 1,000,000 | 60,000 | ||||||||||
Intangibles | 565,000 | 90,000 | ||||||||||
$ | 3,394,000 | $ | 325,000 |
What amount would Poor Co. report for plant assets on its consolidated financial statements immediately after the acquisition transaction?
- A) $3,114,000
- B) $3,054,000
C) $3,079,000
D) $3,129,000
Related Book For
Advanced Accounting
ISBN: 978-0077431808
10th edition
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
Posted Date: