Dunne Inc. bought 65% of the outstanding common stock of Hardy Inc. in an acquisition that resulted in the recognition of goodwill. Hardy owned a piece of land that cost $375,000 but was worth $700,000 at the date of acquisition. What value would be attributed to this land in a consolidated balance sheet at the date of acquisition?

Question

Quizplus · Accepted Answer

In a consolidated balance sheet, assets are recorded at their fair value at the date of acquisition. Therefore, the land would be valued at its fair value of $700,000.

Dunne Inc Bought 65% of the Outstanding Common Stock of Hardy