What amount of goodwill will be included in the cbs

Assignment Help Accounting Basics

Reference no: EM131880911

Question: On December 31, 20X9, Add-On Company acquired 100 percent of Venus Corporation's common stock for $300,000. Balance sheet information Venus just prior to the acquisition is given here:

Cash and Receivables	$35,000
Inventory	75,000
Land	100,000
Buildings and Equipment (net)	220,000
Total Assets	$430,000
Accounts Payable	$65,000
Bonds Payable	150,000
Common Stock	100,000
Retained Earnings	115,000
Total Liabilities and Stockholders' Equity	$430,000

At the date of the business combination, Venus'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.

1. Based on the information provided, what amount of inventory will be included in the consolidated balance sheet immediately following the acquisition?

A. $60,000

B. $75,000

C. $15,000

D. $45,000

2. Based on the information provided, what amount of goodwill will be included in the consolidated balance sheet(CBS) immediately following the acquisition?

A. $30,000

B. $15,000

C. $85,000

D. $45,000

3. Based on the information provided, what amount will be included as investment in Venus Corporation in the consolidated balance sheet immediately following the acquisition?

A. $0

B. $395,000

C. $255,000

D. $300,000

Reference no: EM131880911

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