Perth Corporation acquired a 100% interest in Sansone Company for $1,600,000 when Sansone had no liabilities.The book values and fair values of Sansone's assets were:
Immediately following the acquisition,equipment will be included on the consolidated balance sheet at
A)$150,000.
B)$200,000.
C)$210,000.
D)$280,000.

Question

Perth Corporation acquired a 100% interest in Sansone Company for $1,600,000 when Sansone had no liabilities.The book values and fair values of Sansone's assets were: 
Immediately following the acquisition,equipment will be included on the consolidated balance sheet at
A)$150,000. 
B)$200,000. 
C)$210,000. 
D)$280,000.

Quizplus · Accepted Answer

The equipment, which has a book value of $200,000 and a fair value of $210,000, will be included on the consolidated balance sheet at its fair value of $210,000, as per the acquisition method. Therefore, the correct option is C.

Perth Corporation Acquired a 100% Interest in Sansone Company for $1,600,000