Balance sheets for Fort Corporation and Steele Company on December 31, 2008, before acquisition, are as follows: Fort Steele Cash and Receivables $ 700,000 Inventory Land $240,000 320,000 60,000 720,000 Buildings and Equipment (net) Total 110,000 _510,000 $2.040,000 160,000 $780.000 $ 140,000 Current Payables Long-term Payables 60,000 320,000 200,000 420,000 600,000 880,000 $2,040,000 Common Stock Retained Earnings 200,000 $780,000 Total Note that Steele owed Fort $20,000 on account on 12/31; this amount is reflected in the above balances. Fort Corporation acquired 80 percent of Steele Company's outstanding stock for $450,000 cash on January 1, 2009. On that date, the fair value of Fort's depreciable assets was $600,000 and the fair value of Steele's depreciable assets was $280,000.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Balance sheets for Fort Corporation and Steele Company on December 31, 2008, before
acquisition, are as follows:
Fort
Steele
Cash and Receivables
$ 700,000
720,000
$240,000
Inventory
320,000
Land
110,000
60,000
Buildings and Equipment (net).
510,000
160,000
Total
$2.040.000
$780,000
Current Payables
$ 140,000
60,000
Long-term Payables
Common Stock
420,000
600,000
320,000
200,000
Retained Earnings
880,000
$2,040,000
200,000
$780.000
Total
Note that Steele owed Fort $20,000 on account on 12/31; this amount is reflected in the above
balances. Fort Corporation acquired 80 percent of Steele Company's outstanding stock for
$450,000 cash on January 1, 2009. On that date, the fair value of Fort's depreciable assets was
$600,000 and the fair value of Steele's depreciable assets was $280,000.
Transcribed Image Text:Balance sheets for Fort Corporation and Steele Company on December 31, 2008, before acquisition, are as follows: Fort Steele Cash and Receivables $ 700,000 720,000 $240,000 Inventory 320,000 Land 110,000 60,000 Buildings and Equipment (net). 510,000 160,000 Total $2.040.000 $780,000 Current Payables $ 140,000 60,000 Long-term Payables Common Stock 420,000 600,000 320,000 200,000 Retained Earnings 880,000 $2,040,000 200,000 $780.000 Total Note that Steele owed Fort $20,000 on account on 12/31; this amount is reflected in the above balances. Fort Corporation acquired 80 percent of Steele Company's outstanding stock for $450,000 cash on January 1, 2009. On that date, the fair value of Fort's depreciable assets was $600,000 and the fair value of Steele's depreciable assets was $280,000.
a
5. Based on the information given above, what amount of total assets will be reported in a
consolidated balance sheet prepared immediately following the combination?
A)
B)
C)
$2,512,500.
$2,930,000.
$2,950,000.
$3,020,000.
a
6. Based on the information given above, what amount of total liabilities will be reported in
a consolidated balance sheet prepared immediately following the combination?
A)
B)
$825,000.
$845,000.
$920,000.
$940,000.
D)
Transcribed Image Text:a 5. Based on the information given above, what amount of total assets will be reported in a consolidated balance sheet prepared immediately following the combination? A) B) C) $2,512,500. $2,930,000. $2,950,000. $3,020,000. a 6. Based on the information given above, what amount of total liabilities will be reported in a consolidated balance sheet prepared immediately following the combination? A) B) $825,000. $845,000. $920,000. $940,000. D)
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