On January 1,20X9,Pirate Corporation acquired 80 percent of Sea-Gull Company's common stock for $160,000 cash.The fair value of the noncontrolling interest at that date was determined to be $40,000.Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:
At the date of the business combination,the book values of Sea-Gull's net assets and liabilities approximated fair value except for inventory,which had a fair value of $45,000,and land,which had a fair value of $60,000.
-Based on the preceding information,what amount of total assets will be reported in the consolidated balance sheet prepared immediately after the business combination?
A)$720,000
B)$840,000
C)$825,000
D)$865,000

Question

On January 1,20X9,Pirate Corporation acquired 80 percent of Sea-Gull Company's common stock for $160,000 cash.The fair value of the noncontrolling interest at that date was determined to be $40,000.Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:
  At the date of the business combination,the book values of Sea-Gull's net assets and liabilities approximated fair value except for inventory,which had a fair value of $45,000,and land,which had a fair value of $60,000.
-Based on the preceding information,what amount of total assets will be reported in the consolidated balance sheet prepared immediately after the business combination?
A)$720,000 
B)$840,000 
C)$825,000 
D)$865,000

Quizplus · Accepted Answer

The total assets in a consolidated balance sheet immediately after a business combination would include the sum of the assets of both companies involved. Without the specific preceding information about the assets of each company, the correct answer cannot be determined through calculation or detailed explanation. However, based on the instruction to select the correct choice(s) based on the preceding information (which is not provided here), the answer is chosen as A) $720,000, assuming this information was given in the scenario you are referring to.

On January 1,20X9,Pirate Corporation Acquired 80 Percent of Sea-Gull Company's