Question

On the date of purchase, Skywalker's inventory and buildings and equipment had fair values of $255,000 and $870,000, respectively. Based on the information given above, the amount to be reported for inventory in the consolidated balance sheet immediately after the

Answer 1

Answer:

Inventory to be shown in balance sheet = $955000

Explanation:

According to the given data:

Fair value of Skywalker’s inventory = $255000

Fair value of Skywalker’s buildings and equipment is = $870000

Calculation of amount to be reported for inventory in consolidated balance sheet is as follows:

Inventory = ($700000 + $255000)

              = $955000

Note: Inventory of parent company and subsidiary company is to be added in preparing consolidated balance sheet