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Alla [95]
3 years ago
12

Paris Company had common stock of $350,000 and retained earnings of $490,000. London Inc. had common stock of $700,000 and retai

ned earnings of $980,000. On January 1, 2018, London issued 34,000 shares of common stock with a $12 par value and a $35 fair value for all of Paris Company's outstanding common stock. This combination was accounted for using the acquisition method. Immediately after the combination, what was the amount of total consolidated net assets? A. $2,520,000. B. $1,190,000. C. $1,680,000. D. $2,870,000.
Business
1 answer:
Ganezh [65]3 years ago
8 0

Answer: D. $2870000

Explanation:

Consolidated Assets are the assets that a company owes whether directly or indirectly through a subsidiary which will then be shown on the consolidated balance sheet of the company.

From the information given, the amount of total consolidated net assets will be calculated as:

= ($34000 × 35) + $700,000 + $980,000

= $1,190,000 + $700,000 + $980,000

= $2,870,000

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The following items are taken from the financial statements of Cullumber Company for 2022:
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Answer:

                                          Cullumber Company

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                                          As at 2022

Explanation:                      Amount in $

Current Assets

Accounts Receivable           12,500

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Prepaid Insurance                  6,600

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Non-Current Assets

Equipment (225,000-36,900)  188,100

Total Assets                            <u>  </u><u>224,800</u>

Liabilities & Shareholders' Equity

Current Liabilities

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Notes Payable                      65,000

Salaries Payable                      3,900

Total Current Liabilities           79,500

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Common Stocks                      97,000

Retained Earnings (25,900+133,000-21,400-13,600-2,600-16,800-33,500-6,700)                                          64,300  

Dividends                                   (16,000)

 Total Equity                              145,300

Total Liabilities & shareholders' equity    <u>224,800</u>  

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