West Company acquired 60 percent of Solar Company for $300.000 when Solar's book value was $400,000. The newly comprised 40 percent noncontrolling interest had an assessed fair value of $200,000. Also at the acquisition date, Solar had a trademark (with a 10-year life) that was undervalued in the financial records by $60,000. Also, patented technology (with a 5-year life) was undervalued by 540.000. Two years later, the following figures are reported by these two companies (stockholders' equity accounts have been omitted):

What is the consolidated trademarks balance?

a. $508,000.

b. $514,000.

c. $520.000.

d. $540,000.

Transcribed Image Text:

Current assets Trademarks Patented technology Liabilities Revenues Expenses Investment income West Company Book Solar Company Book Value Value $620,000 260,000 410,000 (390,000) (900,000) 500,000 Not given $300,000 200,000 150,000 (120,000) (400,000) 300,000 Solar Company Fair Value $320,000 280,000 150,000 (120,000) Current assets Trademarks Patented technology Liabilities Revenues Expenses Investment income West Company Book Solar Company Book Value Value $620,000 260,000 410,000 (390,000) (900,000) 500,000 Not given $300,000 200,000 150,000 (120,000) (400,000) 300,000 Solar Company Fair Value $320,000 280,000 150,000 (120,000)

Answer rating: 100% (QA)

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