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Halwell Motor Company acquires all of the stock of Ornex Auto Services for $96,000,000 in cash. The books of Ornex report the following account balances at the date of acquisition (in trial balance format). Date-of-acquisition fair values are also displayed.

Halwell Motor Company acquires all of the stock of Ornex Auto Services for $96,000,000 in cash. The books of Ornex report the following account balances at the date of acquisition (in trial balance format). Date-of-acquisition fair values are also displayed.

FINANCIAL ACCOUNTING
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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Halwell Motor Company acquires all of the stock of Ornex Auto Services for $96,000,000 in cash. The books of Ornex report the following account balances at the date of acquisition (in trial balance format). Date-of-acquisition fair values are also displayed. Current assets Property, net Liabilities Capital stock Retained earnings Total Select one: Book Value Dr (Cr) Fair Value Dr (Cr) $1,600,000 $1,040,000 94,400,000 64,000,000 (56,000,000) $(57,600,000) (16,000,000) (24,000,000) Ornex has no previously unrecorded identifiable intangibles. On the consolidation working paper, eliminating entry (R) O O O $0 a. credits Investment in Ornex by $40,000,000 b. debits capital stock by $16,000,000 c. debits goodwill by $88,560,000 d. debits current assets by $560,000
Transcribed Image Text:Halwell Motor Company acquires all of the stock of Ornex Auto Services for $96,000,000 in cash. The books of Ornex report the following account balances at the date of acquisition (in trial balance format). Date-of-acquisition fair values are also displayed. Current assets Property, net Liabilities Capital stock Retained earnings Total Select one: Book Value Dr (Cr) Fair Value Dr (Cr) $1,600,000 $1,040,000 94,400,000 64,000,000 (56,000,000) $(57,600,000) (16,000,000) (24,000,000) Ornex has no previously unrecorded identifiable intangibles. On the consolidation working paper, eliminating entry (R) O O O $0 a. credits Investment in Ornex by $40,000,000 b. debits capital stock by $16,000,000 c. debits goodwill by $88,560,000 d. debits current assets by $560,000
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