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gladu [14]
3 years ago
12

On December 31, 20X9, Pluto Company acquired 100 percent of Saturn Corporation's common stock for $300,000. Balance sheet inform

ation for Saturn just prior to the acquisition is given here:Cash and Receivables$35,000Inventory75,000Land100,000Buildings and Equipment (net)220,000Total Assets$430,000Accounts Payable$65,000Bonds Payable150,000Common Stock100,000Retained Earnings115,000Total Liabilities and Stockholders' Equity$430,000At the date of the business combination, Saturn'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.Based on the information provided, what amount of inventory will be included in the consolidated balance sheet immediately following the acquisition?
Business
1 answer:
s344n2d4d5 [400]3 years ago
7 0

Answer:

The $60,000 amount of inventory  will be included in the consolidated balance sheet immediately following the acquisition

Explanation:

According to the accounting principles, the inventory is recorded at the cost or fair market value whichever is lower.

The inventory balance which is given in the balance sheet is $75,000

And, its fair market value is $60,000

So, the inventory would be recorded at 60,000

The other items which are given in the question are irrelevant. Therefore, we don't consider them in the computation part. Thus, we ignored them.

Hence, the $60,000 amount of inventory  will be included in the consolidated balance sheet immediately following the acquisition

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Answer:

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Explanation:

A tying agreement is the type of contractual arrangement where a seller offers other(s) product for the purchase of one good as a part of only one bundle. The secondary product might not be necessary but the seller offers it mainly to generate more profit. Tying arrangements are considered anti-competitive practices.

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D

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3 years ago
Carow Corporation purchased on January 1, 2020, as a held-to-maturity investment, $60,000 of the 8%, 5-year bonds of Harrison, I
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Answer:

Entries are given below

Explanation:

Requirement A.

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Entry                                                DEBIT   CREDIT

Held-to-maturity securities            $65,118

cash                                                                $65,118

Requirement B.

The receipt of semiannual interest and premium amortization

Entry                                                DEBIT   CREDIT

cash (60,000 x 8% x 6/12)             $2,400  

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interest revenue(65,118 x.6% x6/12)             $1,954

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Answer:

c.

Explanation:

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