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 |
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 on the date of acquisition, what
is the balance for plant assets?
A. $76,000,000
B. $87,000,000
C. $40,000,000
D. $65,000,000
Homework Answers
The correct answer is d) $65,000,000
Plant Assets balance in the books of Data Cloud is $ 40,000,000
Plant Assets of Supercore to be recorded at fair value which is $25,000,000
Total Balance of Plant Assets at the time of consolidation is $65,000,000
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DataCloud purchased all of the shares of Supercore for $30
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