On January 1,2012,Preview Company acquired all of the stock of a subsidiary.The following data is available:
$\begin{array}{lll}
& \text { Preview Company} & \text { Subsidiary } \
\text { Total assets } & \$ 650 & \$ 400 \
\text { Total liabilities } & \$ 200 & \$ 190 \
\text { Total stockholders' equity }& \$ 450 & \$ 210
\end{array}$
The acquisition by the Preview Company represents a 100 percent interest in the subsidiary.On January 1,2012,the fair value of the subsidiary's assets and liabilities are equal to the book value.Preview Company paid $250 for the 100 percent interest in the subsidiary.On January 1,2012,what are the total assets on the consolidated balance sheet? (Assume elimination entries are completed.)
A) $650
B) $800
C) $840
D) $1,050

Question

On January 1,2012,Preview Company acquired all of the stock of a subsidiary.The following data is available:
$\begin{array}{lll}
& \text { Preview Company} & \text {  Subsidiary } \
\text { Total assets } & \$ 650 & \$ 400 \
\text { Total liabilities }  & \$ 200 & \$ 190 \
\text { Total stockholders' equity }& \$ 450 & \$ 210
\end{array}$
The acquisition by the Preview Company represents a 100 percent interest in the subsidiary.On January 1,2012,the fair value of the subsidiary's assets and liabilities are equal to the book value.Preview Company paid $250 for the 100 percent interest in the subsidiary.On January 1,2012,what are the total assets on the consolidated balance sheet? (Assume elimination entries are completed.)
A) $650
B) $800
C) $840
D) $1,050

Quizplus · Accepted Answer

The total assets on the consolidated balance sheet are the sum of Preview Company's assets ($650) and the subsidiary's assets ($400), minus the cash paid for the acquisition ($250), resulting in $800.

On January 1,2012,Preview Company Acquired All of the Stock of a Subsidiary.The