On December 31, 20X9, Add-On Company acquired 100 percent of Venus Corporation's common stock for $300,000. Balance sheet information Venus just prior to the acquisition is given here:
At the date of the business combination, Venus's net assets and liabilities approximated fair value except for inventory, which had a fair value of $60,000, land which had a fair value of $125,000, and buildings and equipment (net), which had a fair value of $250,000.

-Based on the information provided,what amount will be included as investment in Venus Corporation in the consolidated balance sheet immediately following the acquisition?
A) $0
B) $395,000
C) $255,000
D) $300,000

Question

On December 31, 20X9, Add-On Company acquired 100 percent of Venus Corporation's common stock for $300,000. Balance sheet information Venus just prior to the acquisition is given here:
At the date of the business combination, Venus's net assets and liabilities approximated fair value except for inventory, which had a fair value of $60,000, land which had a fair value of $125,000, and buildings and equipment (net), which had a fair value of $250,000.
 
-Based on the information provided,what amount will be included as investment in Venus Corporation in the consolidated balance sheet immediately following the acquisition?
A) $0 
B) $395,000 
C) $255,000 
D) $300,000

Quizplus · Accepted Answer

In a consolidated balance sheet, the investment in the subsidiary is eliminated, so the amount included as investment in Venus Corporation would be $0.

On December 31, 20X9, Add-On Company Acquired 100 Percent of Venus