Question

On the acquisition date, Stryder reported net assets with a book value of $170,000. A total of $10,000 of the acquisition price is applied to goodwill, which was not impaired in 20X8. Stryder's depreciable assets had an estimated economic life of 10 years on the date of combination. The difference between fair value and book value of tangible assets is related entirely to buildings and equipment. Patriot used the equity method in accounting for its investment in Stryder. Analysis of receivables and payables revealed that Stryder owed Patriot $10,000 on December 31, 20X8.
based on the information provided, what amount of total assets will be reported in the consolidated balance sheet for the year?

$895,000

$801,000

$723,000

$1,111,000

Answer 1

Answer:

$723,000

Explanation:

The consolidation is a process in which parent company acquires controlling interest in another company. Stryder's is a 100% owned subsidiary which had a book value of net assets $170,000. The consolidated amount of assets to be reported in the balance will be sum of parents assets plus subsidiary's assets. The consolidated statement shows the assets of subsidiary's on which parent has claims. The consolidation shows aggregated financial results of the two companies.