Scenario 3-3
Balance sheet information for Pawnee Company and its 90%-owned subsidiary, Sioux Corporation, at December 31, 20X1, is summarized as follows:
Pawnee acquired its interest in Sioux for cash at book value several years ago when Sioux's assets and liabilities were equal to their fair values.
-Refer to Scenario 3-3. Consolidated total assets of Pawnee and Sioux, at December 31, 20X1, will be ____.
A) $1,785,000
B) $1,850,000
C) $2,343,000
D) $2,408,000

Question

Scenario 3-3
Balance sheet information for Pawnee Company and its 90%-owned subsidiary, Sioux Corporation, at December 31, 20X1, is summarized as follows:
  Pawnee acquired its interest in Sioux for cash at book value several years ago when Sioux's assets and liabilities were equal to their fair values.
-Refer to Scenario 3-3. Consolidated total assets of Pawnee and Sioux, at December 31, 20X1, will be ____.
A) $1,785,000 
B) $1,850,000 
C) $2,343,000 
D) $2,408,000

Quizplus · Accepted Answer

The consolidated total assets are calculated by adding the total assets of both Pawnee and Sioux, without double-counting any intercompany transactions or balances.

Scenario 3-3 Balance Sheet Information for Pawnee Company and Its 90%-Owned Subsidiary