ACC-690 Module 6-2 Quiz Question # 11 Watkins, Inc. acquires all of the outstanding stock of Glen Corporation on January 1, 2012.

CC-690

Module 6-2

Quiz

Question # 11

 Watkins, Inc. acquires all of the outstanding stock of Glen Corporation on January 1, 2012. At that date, Glen owns only three assets and has no liabilities:

                                                                          Book Value            Fair value

 Inventory (FIFO method)                               $ 40,000             $ 50,000     

 Equipment(10 Year life)                                     80,000                 75,000

 Building(20 Year life)                                        200,000              300,000      

 If Watkins pays $ 450,000 in cash for Glen, at what amount would Glen’s inventory acquired be represented in a December 31, 2012 consolidated balance sheet?

 0 $ 10,000

 0 $   0

 0 $ 90,000

 0 $ 40,000

 0 $ 50,000

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