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 fair value of equipment is $210,000, which is higher than its book value of $150,000. According to the acquisition method, the equipment will be included on the consolidated balance sheet at its fair value of $210,000. Therefore, the correct answer is C.

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