Paccu Corporation acquired 100 percent of Sallee Company's common stock on January 1,20X7.Balance sheet data for the two companies immediately following the acquisition follow:
At the date of the business combination,the book values of Sallee's assets and liabilities approximated fair value except for inventory,which had a fair value of $55,000,and land,which had a fair value of $65,000.The fair value of land for Paccu Corporation was estimated at $90,000 immediately prior to the acquisition.
-Based on the preceding information,what is the differential associated with the acquisition?
A)$15,000
B)$20,000
C)$22,000
D)$37,000

Question

Paccu Corporation acquired 100 percent of Sallee Company's common stock on January 1,20X7.Balance sheet data for the two companies immediately following the acquisition follow:
  At the date of the business combination,the book values of Sallee's assets and liabilities approximated fair value except for inventory,which had a fair value of $55,000,and land,which had a fair value of $65,000.The fair value of land for Paccu Corporation was estimated at $90,000 immediately prior to the acquisition.
-Based on the preceding information,what is the differential associated with the acquisition?
A)$15,000 
B)$20,000 
C)$22,000 
D)$37,000

Quizplus · Accepted Answer

The Answer of Paccu Corporation acquired 100 percent of Sallee Company's common stock on January 1,20X7.Balance sheet data for the two companies immediately following the acquisition follow:
  At the date of the business combination,the book values of Sallee's assets and liabilities approximated fair value except for inventory,which had a fair value of $55,000,and land,which had a fair value of $65,000.The fair value of land for Paccu Corporation was estimated at $90,000 immediately prior to the acquisition.
-Based on the preceding information,what is the differential associated with the acquisition?
A)$15,000 
B)$20,000 
C)$22,000 
D)$37,000

Paccu Corporation Acquired 100 Percent of Sallee Company's Common Stock