When Valley Co. acquired 80% of the common stock of Coleman Corp., Coleman owned land with a book value of $75,000 and a fair value of $125,000.What amount should have been reported for the land in a consolidated balance sheet at the acquisition date?
A) $40,000.
B) $50,000.
C) $75,000.
D) $100,000.
E) $125,000.

Question

Quizplus · Accepted Answer

In a consolidated balance sheet, assets are reported at their fair value at the acquisition date. Therefore, the land should be reported at its fair value of $125,000.