On January 1, 2024, the Moody Company entered into a transaction for 100% of the outstanding common stock of Osorio Company. To acquire these shares, Moody issued $400 in long- erm liabilities and also issued 40 shares of common stock having a par value of $1 per share but a fair value of $10 per share. Moody paid $20 to lawyers, accountants, and brokers for assistance in bringing about this acquisition. Another $15 was paid in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as ollows: Cash Receivables Inventories Land Buildings (net) Equipment (net) Accounts payable Long-term liabilities Common stock ($1 par) Common stock ($20 par) Additional paid-in capital Retained earnings Note: Parentheses indicate a credit balance. Multiple Choice O O O n Moody's appraisal of Osorio, three assets were deemed to be undervalued on the subsidiary's books: Inventory by $10, Land by $40, and Buildings by $60. Compute the amount of consolidated buildings (net) at date of acquisition. O $1,760 $500 $1,640 $1,700 Moody $ 180 810 1,080 600 1,260 480 (450) (1,290) (330) $1,320 (1,080) (1,260) Osorio $ 40 180 280 360 440 100 (80) (400) (240) (340) (340)

On January 1, 2024, the Moody Company entered into a transaction for 100% of the outstanding common stock of Osorio Company. To acquire these shares, Moody issued $400 in long- erm liabilities and also issued 40 shares of common stock having a par value of $1 per share but a fair value of $10 per share. Moody paid $20 to lawyers, accountants, and brokers for assistance in bringing about this acquisition. Another $15 was paid in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as ollows: Cash Receivables Inventories Land Buildings (net) Equipment (net) Accounts payable Long-term liabilities Common stock ($1 par) Common stock ($20 par) Additional paid-in capital Retained earnings Note: Parentheses indicate a credit balance. Multiple Choice O O O n Moody's appraisal of Osorio, three assets were deemed to be undervalued on the subsidiary's books: Inventory by $10, Land by $40, and Buildings by $60. Compute the amount of consolidated buildings (net) at date of acquisition. O $1,760 $500 $1,640 $1,700 Moody $ 180 810 1,080 600 1,260 480 (450) (1,290) (330) $1,320 (1,080) (1,260) Osorio $ 40 180 280 360 440 100 (80) (400) (240) (340) (340)

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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