On January 1,20X8,Patriot Company acquired 100 percent of Stryder Company for $220,000 cash.The trial balances for the two companies on December 31,20X8,included the following amounts:
On the acquisition date,Stryder reported net assets with a book value of $170,000.A total of $10,000 of the acquisition price is applied to goodwill,which was not impaired in 20X8.Stryder's depreciable assets had an estimated economic life of 10 years on the date of combination.The difference between fair value and book value of tangible assets is related entirely to buildings and equipment.Patriot used the equity method in accounting for its investment in Stryder.Analysis of receivables and payables revealed that Stryder owed Patriot $10,000 on December 31,20X8.
-Based on the information provided,the differential associated with this acquisition is:
A)$36,000.
B)$40,000.
C)$10,000.
D)$50,000.

Question

On January 1,20X8,Patriot Company acquired 100 percent of Stryder Company for $220,000 cash.The trial balances for the two companies on December 31,20X8,included the following amounts:
  On the acquisition date,Stryder reported net assets with a book value of $170,000.A total of $10,000 of the acquisition price is applied to goodwill,which was not impaired in 20X8.Stryder's depreciable assets had an estimated economic life of 10 years on the date of combination.The difference between fair value and book value of tangible assets is related entirely to buildings and equipment.Patriot used the equity method in accounting for its investment in Stryder.Analysis of receivables and payables revealed that Stryder owed Patriot $10,000 on December 31,20X8.
-Based on the information provided,the differential associated with this acquisition is:
A)$36,000. 
B)$40,000. 
C)$10,000. 
D)$50,000.

Quizplus · Accepted Answer

The Answer of On January 1,20X8,Patriot Company acquired 100 percent of Stryder Company for $220,000 cash.The trial balances for the two companies on December 31,20X8,included the following amounts:
  On the acquisition date,Stryder reported net assets with a book value of $170,000.A total of $10,000 of the acquisition price is applied to goodwill,which was not impaired in 20X8.Stryder's depreciable assets had an estimated economic life of 10 years on the date of combination.The difference between fair value and book value of tangible assets is related entirely to buildings and equipment.Patriot used the equity method in accounting for its investment in Stryder.Analysis of receivables and payables revealed that Stryder owed Patriot $10,000 on December 31,20X8.
-Based on the information provided,the differential associated with this acquisition is:
A)$36,000. 
B)$40,000. 
C)$10,000. 
D)$50,000.

On January 1,20X8,Patriot Company Acquired 100 Percent of Stryder Company