Multiple Choice a. $900. b. $1,400. c. $1,900. d. $2,400. e. $2,600. FairValue$1,2001,3501,300Long-term liabilities 1,750BuildingsEquipmentLandAny excess of consideration transferred over fair value of net assets acquired is considered goodwill with an indefinite life.Compute the consideration transferred in excess of book value acquired at January 1, 2020.Multiple Choice$900.$1,400.$1,900.< Prev9 of 25Next > Jackson Company acquires 100% of the stock of Clark Corporation on January 1, 2020, for $4,100 cash. As of that date Clark has the following trialbalance:CashAccounts receivableInventoryBuildings (net) (5 year life)Equipment (net) (2 year life)LandAccounts payableLong-term liabilities (due12/31/22)Common stockAdditional paid-in capitalRetained earningsTotal2020 2021$14050Debit$ 500600900Net income $120Dividends401,6001,000900$5,500CreditNet income and dividends reported by Clark for 2020 and 2021 follow:4001,9001,0007001,500$5,500The fair value of Clark's net assets that differ from their book values are listed below:

Consideration transferred more than book value = purchase consideration - Net assets…

Answered: Compute the consideration transferred…

Business

Accounting

Compute the consideration transferred in excess of book value acquired at January 1, 2020.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Multiple Choice

a. $900.
b. $1,400.
c. $1,900.
d. $2,400.
e. $2,600.

Fair
Value
$1,200
1,350
1,300
Long-term liabilities 1,750
Buildings
Equipment
Land
Any excess of consideration transferred over fair value of net assets acquired is considered goodwill with an indefinite life.
Compute the consideration transferred in excess of book value acquired at January 1, 2020.
Multiple Choice
$900.
$1,400.
$1,900.
< Prev
9 of 25
Next >

Jackson Company acquires 100% of the stock of Clark Corporation on January 1, 2020, for $4,100 cash. As of that date Clark has the following trial
balance:
Cash
Accounts receivable
Inventory
Buildings (net) (5 year life)
Equipment (net) (2 year life)
Land
Accounts payable
Long-term liabilities (due
12/31/22)
Common stock
Additional paid-in capital
Retained earnings
Total
2020 2021
$140
50
Debit
$ 500
600
900
Net income $120
Dividends
40
1,600
1,000
900
$5,500
Credit
Net income and dividends reported by Clark for 2020 and 2021 follow:
400
1,900
1,000
700
1,500
$5,500
The fair value of Clark's net assets that differ from their book values are listed below:

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