On January 1,2015,the Shaw Corporation purchased 70% of the Ward Company's voting stock for $1,050,000.Ward's net assets had a book value of $1,200,000;the fair value of Ward's equipment was $200,000 greater than its book value.The book value of Shaw's assets immediately after the acquisition of Ward totaled $3,750,000 while Ward's assets had a book value of $2,150,000.Assuming that Shaw used the acquisition method to prepare its consolidated balance sheet,what was total consolidated assets as of January 1,2015?

Question

Quizplus · Accepted Answer

$5,150,000 = $3,750,000 + $2,150,000 - $1,050,000 + 200,000 + 100,000 (goodwill: $1,050,000/.7 = $1,500,000 - $1,200,000 - $200,000)

On January 1,2015,the Shaw Corporation Purchased 70% of the Ward