On December 31, 20X9, Add-On Company acquired 100 percent of Venus Corporation's common stock for $300,000. Balance sheet information Venus just prior to the acquisition is given here:

Cash and Receivables	$35,000
Inventory	75,000
Land	100,000
Buildings and Equipment (net)	220,000
Total Assets	$430,000
Accounts Payable	$65,000
Bonds Payable	150,000
Common Stock	100,000
Retained Earnings	115,000
Total Liabilities and Stockholders’ Equity	$430,000

At the date of the business combination, Venus's net assets and liabilities approximated fair value except for inventory, which had a fair value of $60,000, land which had a fair value of $125,000, and buildings and equipment (net), which had a fair value of $250,000.

1. Required information

Based on the information provided, what amount of inventory will be included in the consolidated balance sheet immediately following the acquisition?

$60,000

$75,000

$15,000

$45,000

2. Required information

Based on the information provided, what amount of goodwill will be included in the consolidated balance sheet immediately following the acquisition?

$30,000

$15,000

$85,000

$45,000

3. Required information

Based on the information provided, what amount will be included as investment in Venus Corporation in the consolidated balance sheet immediately following the acquisition?

$0

$395,000

$255,000

$300,000

Answer rating: 100% (QA)

Answer 1 Value of Inventory for Consolid... View the full answer