On January 1, 20X6, Parent Company acquired 80% of the outstanding shares of Subsidiary Company. At the time of the acquisition, Parent Company's current and long- term liabilities were $30 and $180, respectively. Subsidiary Company's current and long- term liabilities were $80 and
$200, respectively. The balance in liabilities on the consolidated balance sheet immediately after the acquisition of Subsidiary Company's stock is:

Question

Quizplus · Accepted Answer

The consolidated balance sheet includes the full amount of both the parent and subsidiary's liabilities. Therefore, the total liabilities are $30 (Parent's current) + $180 (Parent's long-term) + $80 (Subsidiary's current) + $200 (Subsidiary's long-term) = $490.

On January 1, 20X6, Parent Company Acquired 80% of the Outstanding