On January 1, 20X8, Falcon Co. (Falcon) and Eagle Co. (Eagle) had condensed balance sheets as follows: Falcon Eagle Current assets $85,000 $25,000|| Noncurrent assets $110,000 $55,000|| Current liabilities $40,000 $15,000|| Long-term debt $75,000 $10,000 Stockholders' equity $80,000 $55,000 On January 3, 20X8, Falcon borrowed $105,000 and used the proceeds to acquire 95% of the outstanding common shares of Eagle. This debt is payable in twelve equal annual principal and accrued interest payments beginning December 31, 20X8. On the acquisition date, the fair value of Eagle was $120,000, and the excess cost of the investment over Eagle's carrying amount of acquired net assets should be allocated 70% to inventory and 30% to goodwill. Noncurrent liabilities on the January 3, 20X8, consolidated balance sheet should be: A. $85,000 B. $190,000 C. $95,000 D. $180,000

On January 1, 20X8, Falcon Co. (Falcon) and Eagle Co. (Eagle) had condensed balance sheets as follows: Falcon Eagle Current assets $85,000 $25,000|| Noncurrent assets $110,000 $55,000|| Current liabilities $40,000 $15,000|| Long-term debt $75,000 $10,000 Stockholders' equity $80,000 $55,000 On January 3, 20X8, Falcon borrowed $105,000 and used the proceeds to acquire 95% of the outstanding common shares of Eagle. This debt is payable in twelve equal annual principal and accrued interest payments beginning December 31, 20X8. On the acquisition date, the fair value of Eagle was $120,000, and the excess cost of the investment over Eagle's carrying amount of acquired net assets should be allocated 70% to inventory and 30% to goodwill. Noncurrent liabilities on the January 3, 20X8, consolidated balance sheet should be: A. $85,000 B. $190,000 C. $95,000 D. $180,000

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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Practice Help
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