DataCloud purchased all of the shares of Supercore for $30 million in cash. The balance sheets...

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DataCloud purchased all of the shares of Supercore for $30 million in cash. The balance sheets...

DataCloud purchased all of the shares of Supercore for $30 million in cash. The balance sheets of DataCloud and Supercore just after the acquisition appear below, along with fair value information for Supercore's net assets.

DataCloud

Supercore

Book Value

Fair Value

Dr (Cr)

Current assets	$ 10,000,000	$ 5,000,000	$ 4,000,000
Plant assets	40,000,000	36,000,000	25,000,000
Identifiable intangible assets	--	--	10,000,000
Investment in Supercore	30,000,000	--	--
Liabilities	(35,000,000)	(37,800,000)	(37,500,000)
Capital stock	(30,000,000)	(5,000,000)
Retained earnings	(15,600,000)	1,500,000
Treasury stock	100,000	100,000
Accumulated other comprehensive loss	500,000	200,000
Total	$ 0	$ 0

On the consolidated balance sheet at the date of acquisition, what is the balance for retained earnings?

A. $14,100,000

B. $17,100,000

C. $15,600,000

D. $0

business accounting

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Answer 1

Answer #1

The balance for retained earnings on the consolidated balance sheet will be the Retained earnings balance of DataCloud.

Retained earnings balance of DataCloud is 15,600,000

Option C $15,600,000 is correct

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Answer 2

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DataCloud purchased all of the shares of Supercore for $30 million in cash. The balance sheets...

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