On January 1, 20X6, Pumpkin Corporation acquired 70 percent of Spice Company's common stock for $210,000 cash. The fair value of the noncontrolling interest at that date was determined to be $90,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Cash Accounts Receivable Pumpkin $ 50,000 70,000 Spice $ 15,000 25,000 Inventory 30,000 20,000 Land 150,000 80,000 Buildings and Equipment 250,000 200,000 Less: Accumulated Depreciation (70,000) (20,000) Investment in Spice Co. 210,000 Total Assets $690,000 $320,000 Accounts Payable $ 40,000 Bonds Payable 150,000 $ 10,000 40,000 Common Stock 300,000 90,000 Retained Earnings 200,000 180,000 Total Liabilities and Equity $690,000 $320,000
On January 1, 20X6, Pumpkin Corporation acquired 70 percent of Spice Company's common stock for $210,000 cash. The fair value of the noncontrolling interest at that date was determined to be $90,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Cash Accounts Receivable Pumpkin $ 50,000 70,000 Spice $ 15,000 25,000 Inventory 30,000 20,000 Land 150,000 80,000 Buildings and Equipment 250,000 200,000 Less: Accumulated Depreciation (70,000) (20,000) Investment in Spice Co. 210,000 Total Assets $690,000 $320,000 Accounts Payable $ 40,000 Bonds Payable 150,000 $ 10,000 40,000 Common Stock 300,000 90,000 Retained Earnings 200,000 180,000 Total Liabilities and Equity $690,000 $320,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, 20X6, Pumpkin Corporation acquired 70 percent of Spice Company's common stock for $210,000 cash. The
fair value of the noncontrolling interest at that date was determined to be $90,000. Data from the balance sheets of the
two companies included the following amounts as of the date of acquisition:
Cash
Accounts Receivable
Pumpkin
$ 50,000
70,000
Spice
$ 15,000
25,000
Land
Inventory
Buildings and Equipment
Investment in Spice Co.
30,000
20,000
150,000
80,000
250,000
200,000
Less: Accumulated Depreciation
(70,000)
(20,000)
210,000
Total Assets
$690,000
$320,000
Accounts Payable
Bonds Payable
$ 40,000
150,000
$ 10,000
40,000
Common Stock
300,000
90,000
Retained Earnings
Total Liabilities and Equity
200,000
$690,000
180,000
$320,000
At the date of the business combination, the book values of Spice's assets and liabilities approximated fair value except
for inventory, which had a fair value of $30,000, and land, which had a fair value of $95,000.
Based on the preceding information, what amount of total liabilities will be reported in the consolidated balance sheet prepared immediately after the
business combination?
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