On January 1, 20X9, Peanuts Corporation acquired 80 percent of Schulz Corporation's voting common stock. On...
On January 1, 20X9, Peanuts Corporation acquired 80 percent of Schulz Corporation's voting common stock. On that date, Peanuts had equipment with a book value of $50,000 and a fair value of $200,000. Schulz's buildings and equipment had a book value of $300,000 and a fair value of $300,000 at the time of acquisition. What will be the amount at which buildings and equipment will be reported in consolidated statements immediately following the acquisition?
Homework Answers
Answer:
Amount at which buildings and equipment will be reported in consolidated statements immediately following the acquisition = $350,000
Working:
Peanut Corporation acquired Schulz Corporation:
Immediately prior to acquisition:
Peanut's equipment had a book value = $50,000
Schulz's buildings and equipment had a book value = Fair value = $300,000
Immediately following the acquisition
Building and equipment on consolidated balance sheet = 50000 + 300000 = $350,000
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