Park Strand Current assets ... $ 70,000 $20,000 40,000 Noncurrent assets 90,000 Total assets.... Current liabilities.. Long-term debt. Stockholders' equity . $160,000 $ 30,000 50,000 80,000 $60,000 $10,000 -0- 50,000 $60,000 Total liabilities and equities. $160,000
Use the following information for Problems 17 through 21:
On January 1, Park Corporation and Strand Corporation had condensed balance sheets as follows:
On January 2, Park borrowed $60,000 and used the proceeds to obtain 80 percent of the outstanding common shares of Strand. The acquisition price was considered proportionate to Strand’s total fair value. The $60,000 debt is payable in 10 equal annual principal payments, plus interest, beginning December 31. The excess fair value of the investment over the underlying book value of the acquired net assets is allocated to inventory (60 percent) and to
Current liabilities:
a. $50,000
b. $46,000
c. $40,000
d. $30,000
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