Question

Use the following information to answer question(s) below.

On January 1, 2011, Punch Corporation purchased 80% of the common stock of Soopy Co. Separate balance sheet data for the companies at the acquisition date(after the acquisition) are given below:

Punch Soopy

Cash $34,000 $206,000

Accounts Receivable 144,000 26,000

Inventory 132,000 38,000

Land 68,000 32,000

Plant assets 700,000 300,000

Accum. Depreciation (240,000) (60,000)

Investment in Soopy 392,000

Total assets $ 1,230,000 $ 542,000

Accounts payable $206,000 $142,000

Capital stock 800,000 300,000

Retained earnings 224,000 100,000

Total liabilities & equities $ 1,230,000 $ 542,000

At the date of the acquisition, the book values of Soopy's net assets were equal to the fair value except for Soopy's inventory, which had a fair value of $60,000.

Determine below what the consolidated balance would be for each of the requested accounts.

What is the amount of total assets?

A) $1,380,000

B) $1,402,000

C) $1,470,000

D) $1,875,000

Answer

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