On January 1, 20X6, Parent Company acquired 80% of the outstanding shares of Subsidiary Company.At the time of the acquisition, Parent Company's current and long-term liabilities were $30 and $180, respectively.Subsidiary Company's current and long-term liabilities were $80 and $200, respectively.The balance in liabilities on the consolidated balance sheet immediately after the acquisition of Subsidiary Company's stock is _____.
A)$?0
B)$490
C)$338
D)$280

Question

Quizplus · Accepted Answer

In consolidation, the entire liabilities of both the parent and subsidiary are combined, regardless of the percentage ownership. Therefore, Parent Company's liabilities ($30 current + $180 long-term = $210) plus Subsidiary Company's liabilities ($80 current + $200 long-term = $280) equals $490 in total liabilities on the consolidated balance sheet.

On January 1, 20X6, Parent Company Acquired 80% of the Outstanding