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Jackson Company acquires 100% of the stock of Clark Corporation on January 1, 2023, for $4,100 cash. As of that date Clark has the following trial balance: Cash Accounts receivable Debit $ 500 Credit 600 Inventory 900 Buildings (net) (5-year life) 1,600 Equipment (net) (2-year life) 1,000

Jackson Company acquires 100% of the stock of Clark Corporation on January 1, 2023, for $4,100 cash. As of that date Clark has the following trial balance: Cash Accounts receivable Debit $ 500 Credit 600 Inventory 900 Buildings (net) (5-year life) 1,600 Equipment (net) (2-year life) 1,000

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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Jackson Company acquires 100% of the stock of Clark Corporation on January 1, 2023, for $4,100 cash. As of that date Clark has the following trial balance: Debit Credit Cash Accounts receivable $ 500 600 Inventory 900 Buildings (net) (5-year life) 1,600 Equipment (net) (2-year life) 1,000 Land 900 Accounts payable Long-term liabilities (due 12/31/25) Common stock Additional paid-in capital $ 400 1,900 1,000 700 Retained earnings 1,500 $ 5,500 $ 5,500 Total Net income and dividends reported by Clark for 2023 and 2024 follow: 2023 2024 Net income Dividends $ 120 $ 140 40 50 The fair value of Clark's net assets that differ from their book values are listed below: Fair Value Buildings Equipment Land Long-term liabilities $ 1,200 1,350 1,300 1,750 Any excess of consideration transferred over fair value of net assets acquired is considered goodwill with an indefinite life. Compute the amount of Clark's buildings that would be reported in a December 31, 2023, consolidated balance sheet.
Transcribed Image Text:Jackson Company acquires 100% of the stock of Clark Corporation on January 1, 2023, for $4,100 cash. As of that date Clark has the following trial balance: Debit Credit Cash Accounts receivable $ 500 600 Inventory 900 Buildings (net) (5-year life) 1,600 Equipment (net) (2-year life) 1,000 Land 900 Accounts payable Long-term liabilities (due 12/31/25) Common stock Additional paid-in capital $ 400 1,900 1,000 700 Retained earnings 1,500 $ 5,500 $ 5,500 Total Net income and dividends reported by Clark for 2023 and 2024 follow: 2023 2024 Net income Dividends $ 120 $ 140 40 50 The fair value of Clark's net assets that differ from their book values are listed below: Fair Value Buildings Equipment Land Long-term liabilities $ 1,200 1,350 1,300 1,750 Any excess of consideration transferred over fair value of net assets acquired is considered goodwill with an indefinite life. Compute the amount of Clark's buildings that would be reported in a December 31, 2023, consolidated balance sheet.
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