Jackson Company acquires 100% of the stock of Clark Corporation on January 1, 2023, for $4,100 cash. As of that date Clark has the following trial balance: Cash Accounts receivable Debit $ 500 Credit 600 Inventory 900 Buildings (net) (5-year life) 1,600 Equipment (net) (2-year life) 1,000 Land 900 Accounts payable Long-term liabilities (due 12/31/25) Common stock Additional paid-in capital $ 400 1,900 1,000 700 Retained earnings 1,500 $ 5,500 $ 5,500 Total Net Income and dividends reported by Clark for 2023 and 2024 follow: 2023 2024 Net income Dividends $ 120 $ 140 40 50 The fair value of Clark's net assets that differ from their book values are listed below: Fair Value Buildings Equipment Land Long-term liabilities $ 1,200 1,350 1,300 1,750 Any excess of consideration transferred over fair value of net assets acquired is considered goodwill with an indefinite life. Compute the amount of Clark's buildings that would be reported in a December 31, 2023, consolidated balance sheet.
Jackson Company acquires 100% of the stock of Clark Corporation on January 1, 2023, for $4,100 cash. As of that date Clark has the following trial balance: Cash Accounts receivable Debit $ 500 Credit 600 Inventory 900 Buildings (net) (5-year life) 1,600 Equipment (net) (2-year life) 1,000 Land 900 Accounts payable Long-term liabilities (due 12/31/25) Common stock Additional paid-in capital $ 400 1,900 1,000 700 Retained earnings 1,500 $ 5,500 $ 5,500 Total Net Income and dividends reported by Clark for 2023 and 2024 follow: 2023 2024 Net income Dividends $ 120 $ 140 40 50 The fair value of Clark's net assets that differ from their book values are listed below: Fair Value Buildings Equipment Land Long-term liabilities $ 1,200 1,350 1,300 1,750 Any excess of consideration transferred over fair value of net assets acquired is considered goodwill with an indefinite life. Compute the amount of Clark's buildings that would be reported in a December 31, 2023, consolidated balance sheet.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 8MC
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