Beta Company acquired 100 percent of the voting common shares of Standard Video Corporation, its bitter rival, by issuing bonds with a par value and fair value of $150,000. Immediately prior to the acquisition, Beta reported total assets of $500,000, liabilities of $280,000, and stockholders' equity of $220,000. At that date, Standard Video reported total assets of $400,000, liabilities of $250,000, and stockholders' equity of $150,000. Included in Standard's liabilities was an account payable to Beta in the amount of $20,000, which Beta included in its accounts receivable.
-Based on the preceding information,what amount of total assets did Beta report in its balance sheet immediately after the acquisition?
A) $500,000
B) $650,000
C) $750,000
D) $900,000

Question

Quizplus · Accepted Answer

Beta's total assets immediately after the acquisition are $650,000. This is calculated by adding the fair value of the bonds issued ($150,000) to Beta's total assets before the acquisition ($500,000).

Beta Company Acquired 100 Percent of the Voting Common Shares