On January 1, 20X6, Polka Co. (Polka) and Strauss Co. (Strauss) had condensed balance sheets as follows: Polka Strauss Current assets $70,000 $20,000 Noncurrent assets $90,000 $40,000 Current liabilities $30,000 $10,000 $50,000 $0 Long-term debt Stockholders' equity $80,000 $50,000 On January 2, 20X6, Polka borrowed $90,000 and used the proceeds to acquire 90% of the outstanding common shares of Strauss. This debt is payable in ten equal annual principal and accrued interest payments beginning December 30, 20X6. On the acquisition date, the fair value of Strauss was $100,000, and the excess cost of the investment over Strauss's carrying amount of acquired net assets should be allocated 60% to inventory and 40% to goodwill. Noncurrent liabilities on the January 2, 20X6, consolidated balance sheet should be: A. $109,000 B. $55,000 C. $104,000 D. $131,000

On January 1, 20X6, Polka Co. (Polka) and Strauss Co. (Strauss) had condensed balance sheets as follows: Polka Strauss Current assets $70,000 $20,000 Noncurrent assets $90,000 $40,000 Current liabilities $30,000 $10,000 $50,000 $0 Long-term debt Stockholders' equity $80,000 $50,000 On January 2, 20X6, Polka borrowed $90,000 and used the proceeds to acquire 90% of the outstanding common shares of Strauss. This debt is payable in ten equal annual principal and accrued interest payments beginning December 30, 20X6. On the acquisition date, the fair value of Strauss was $100,000, and the excess cost of the investment over Strauss's carrying amount of acquired net assets should be allocated 60% to inventory and 40% to goodwill. Noncurrent liabilities on the January 2, 20X6, consolidated balance sheet should be: A. $109,000 B. $55,000 C. $104,000 D. $131,000

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 30BEB: Klynveld Companys balance sheet shows total liabilities of 94,000,000, total stockholders equity of...

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