On January 2015 Limestone Corporation paid $340,000 for all of Gravel Rock Company's outstanding common stock. On that date, the costs and fair values of Gravel Rockrecorded assets and liabilities were as follows:

	Cost	Fair Value
Cash and Receivables	$50,000	$50,000
Inventory	120,000	125,000
Buildings and Equipment (net)	200,000	240,000
Liabilities	(100,000)	(100,000)
Net assets	$270,000	$315,000

a. Based on the preceding information, the differential reflected in a consolidation worksheet to prepare a consolidated balance sheet immediately after the business combination is:

• $0.
• $25,000.
• $70,000.
• $45,000.
• 
  

b. Based on the preceding information, what amount should be allocated to goodwill in the consolidated balance sheet, prepared after this business combination?

• $0
• $25,000
• $70,000
• $45,000

Answer rating: 100% (QA)

AAnswer Answer is C The differential reflected in a consolidation worksheet to prepare a c... View the full answer