ACC-690 Module 6-2 Quiz Question#10 On January 1,2013, the Moody Company entered into a transaction for 100% of the outstanding common stock

ACC-690 Module 6-2 Quiz Question # 11 Watkins, Inc. acquires all of the outstanding stock of Glen Corporation on January 1, 2012.
June 28, 2019
C-690 Module 6-2 Quiz Question #9 Which of the following statements is true regarding the acquisition method of accounting for a business combination?
June 28, 2019

ACC-690

Module 6-2

Quiz

Question#10

 On January 1,2013, the Moody Company entered into a transaction for 100% of the outstanding common stock of Osorio Company. to acquire these shares, Moody issues $400 long term liabilities and 40 shares of common stock having a par value of $1 per share but a fair value of $ 10 per share. Moody paid $ 20 to lawyers, accountants, and brokers for assistance in bringing about this acquisition. Another $15 was paid in connection with stock issuance costs. Prior to these transactions, the balance sheet for the two companies were as follows:

                                                                         Moody                  Osorio

Cash                                                               $ 180                       $ 40

 Receivables                                                     180                           40

 Inventories                                                       810                          180

 Land                                                               1,080                         280

 Building(net)                                                  1,260                         440

 Equipment(net)                                               480                          100

Account Payable                                            (450)                         (80)

 Long term liabilities                                    (1,290)                        (400)

 Common stock($ 1 par)                               (330)

 Common stock($20 par)                                                               (240)

 Additional Paid in capital                            (1080)                        (340)

Retained earnings                                        (1260)                        (340)

 Note: Parentheses indicate a credit balance.

 In Moody appraisal of Osorio, three asset were deemed to be undervalued on the subsidiary’s books: Inventory by $ 10, Land by $ 40, Building by $ 60.

 Compute the amount of consolidated land at date of acquisition.

 0 $ 320

 0 $ 1,000

 0 $ 400

 0 $ 960

 0 $ 920  

 
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