FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:Huey Company acquires 100% of the stock of Solar Corporation on January 1, 2019, for $2,400,000 cash. As of that date Solar had
the following account balances:
Cash
Accounts receivable
Inventory
Building-net (10 year life)
Equipment-net (5 year life)
Land
Accounts Payable
Bonds Payable (Face amount $1,000,000,
due 12/31/2023)
Common stock
Additional paid-in capital
Retained earnings
Select one:
Book Value
$630,000
775,000
350,000
1,000,000 900,000
300,000
400,000
600,000
900,000
125,000 125,000
A. $60,000
B. $50,000
C. $80,000
D. $10,000
Fair value
$630,000
775,000
400,000
2,000,000
500,000
250,000
780,000
In 2019 and 2020, Solar had net income of $250,000 and $240,000, respectively. In addition, Solar paid dividends of $16,000 in
both years. Inventory is assumed to be sold in 2019. Assume straight line amortization/ depreciation for assets and bonds
payable.
Compute the AAP amortization for 2019.
2,050,000
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