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On December 31, 20X8, Mercury Corporation acquired 100 percent ownership of Saturn Corporation. On that date, Saturn reported assets and liabilities with book values of $400,000 and $100,000, respectively, common stock outstanding of $50,000, and retained earnings of $250,000. The book values and fair values of Saturn's assets and liabilities were identical except for land which had increased in value by $10,000 and inventories which had increased by $5,000. Based on the preceding information, what amount will be the  differential, if the acquisition price was $500,000?   Group of answer choices Zero $185,000 $100,000 $200,000

On December 31, 20X8, Mercury Corporation acquired 100 percent ownership of Saturn Corporation. On that date, Saturn reported assets and liabilities with book values of $400,000 and $100,000, respectively, common stock outstanding of $50,000, and retained earnings of $250,000. The book values and fair values of Saturn's assets and liabilities were identical except for land which had increased in value by $10,000 and inventories which had increased by $5,000. Based on the preceding information, what amount will be the  differential, if the acquisition price was $500,000?   Group of answer choices Zero $185,000 $100,000 $200,000

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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On December 31, 20X8, Mercury Corporation acquired 100 percent ownership of Saturn Corporation. On that date, Saturn reported assets and liabilities with book values of $400,000 and $100,000, respectively, common stock outstanding of $50,000, and retained earnings of $250,000. The book values and fair values of Saturn's assets and liabilities were identical except for land which had increased in value by $10,000 and inventories which had increased by $5,000.

Based on the preceding information, what amount will be the  differential, if the acquisition price was $500,000?

 

Group of answer choices
Zero
$185,000
$100,000
$200,000
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