Pickup Company acquired 100 percent of the voting common shares of Sedan Corporation by issuing bonds with a par value and fair value of $200,000.Immediately prior to the acquisition,Pickup reported total assets of $600,000,liabilities of $370,000,and stockholders' equity of $230,000.At that date,Sedan reported total assets of $500,000,liabilities of $300,000,and stockholders' equity of $200,000.Included in Sedan's liabilities was an account payable to Pickup in the amount of $50,000,which Pickup included in its accounts receivable.
-Based on the preceding information,what amount of total assets was reported in the consolidated balance sheet immediately after acquisition?
A)$600,000
B)$800,000
C)$1,050,000
D)$1,150,000

Question

Quizplus · Accepted Answer

The consolidated balance sheet includes the combined assets of Pickup and Sedan. Pickup's assets are $600,000, and Sedan's assets are $500,000. However, the $50,000 account payable from Sedan to Pickup is eliminated in consolidation, resulting in total consolidated assets of $1,050,000.

Pickup Company Acquired 100 Percent of the Voting Common Shares