On January 1, 20X9, Pirate Corporation acquired 80 percent of Sea-Gull Company's common stock for $160,000 cash. The fair value of the noncontrolling interest at that date was determined to be $40,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Cash Accounts Receivable Inventory Land Buildings and Equipment Less Accumulated Depreciation Investment in Sea-Gull Corp. Total Assets Accounts Payable Bonds Payable Common Stock Retained Earnings Total Liabilities and Equity Pirate Corp $ 60,000 80,000 90,000 100,000 200,000 (80,000) 160,000 $ 610.000 110,000 95,000 200,000 205,000 610,000 Sea-Gull Corp $ 20,000 30,000 40,000 40,000 150,000 (50,000) $ 230,000 30,000 40,000 40,000 120,000 $ 230,000 At the date of the business combination, the book values of Sea-Gull's net assets and liabilities approximated fair value except for inventory, which had a fair value of $45,000, and land, which had a fair value of $60,000. Based on the preceding information, what amount of total assets will be reported in the consolidated balance sheet prepared immediately after the business combination? O $865,000 O $825,000 O $840,000 O$720,000

On January 1, 20X9, Pirate Corporation acquired 80 percent of Sea-Gull Company's common stock for $160,000 cash. The fair value of the noncontrolling interest at that date was determined to be $40,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Cash Accounts Receivable Inventory Land Buildings and Equipment Less Accumulated Depreciation Investment in Sea-Gull Corp. Total Assets Accounts Payable Bonds Payable Common Stock Retained Earnings Total Liabilities and Equity Pirate Corp $ 60,000 80,000 90,000 100,000 200,000 (80,000) 160,000 $ 610.000 110,000 95,000 200,000 205,000 610,000 Sea-Gull Corp $ 20,000 30,000 40,000 40,000 150,000 (50,000) $ 230,000 30,000 40,000 40,000 120,000 $ 230,000 At the date of the business combination, the book values of Sea-Gull's net assets and liabilities approximated fair value except for inventory, which had a fair value of $45,000, and land, which had a fair value of $60,000. Based on the preceding information, what amount of total assets will be reported in the consolidated balance sheet prepared immediately after the business combination? O $865,000 O $825,000 O $840,000 O$720,000

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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