A company has decided to purchase 100% of the voting shares of B Company for $100,000 on January 1,20x2.Immediately before the acquisition,A and B reported cash balances of $300,000 and 150,000 respectively.If Consolidated Financial Statements were prepared immediately following the acquisition,how much Cash would be reported on A's consolidated balance sheet?
A)$250,000
B)$350,000
C)$550,000
D)$450,000

Question

Quizplus · Accepted Answer

The consolidated balance sheet would show a cash balance of $450,000. 
This is because the acquiring company (A) would add its own cash balance of $300,000 to the cash balance of the acquired company (B) of $150,000.

A Company Has Decided to Purchase 100% of the Voting