Percy Inc.acquired 80% of the outstanding stock of Sillson Company in a business combination.The book values of Sillson's net assets are equal to the fair values except for the building,whose net book value and fair value are $500,000 and $800,000,respectively.At what amount is the building reported on the consolidated balance sheet?
A)$400,000
B)$500,000
C)$640,000
D)$800,000

Question

Quizplus · Accepted Answer

In a business combination, assets are reported at their fair value on the consolidated balance sheet. Therefore, the building should be reported at its fair value of $800,000.

Percy Incacquired 80% of the Outstanding Stock of Sillson Company in in a Business