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1 Igneel acquires 100% of the stock of Acnologia on January 1, 2020, for $4,100 cash. As of that date Acnologia has the following trial
1 Igneel acquires 100% of the stock of Acnologia on January 1, 2020, for $4,100 cash. As of that date Acnologia has the following trial balance: Debit Credit Cash $ 500 4.34 points Accounts receivable 600 Inventory 900 80117:27 Buildings (net) (5 year life) 1,600 Equipment (net) (2 year life) 1,000 Land 900 Accounts payable $ 400 Long-term liabilities (due 1,900 12/31/22) Common stock 1,000 Additional paid-in capital Retained earnings Total 700 1,500 $5,500 $5,500 Net income and dividends reported by Acnologia for 2020 and 2021 follow: 2020 2021 Net income $120 $140 Dividends 40 50 The fair value of Acnologia's net assets that differ from their book values are listed below: Buildings Equipment Land Fair Value $1,200 1,350 1,300 Long-term liabilities 1,750 Any excess of consideration transferred over fair value of net assets acquired is considered goodwill with an indefinite life. Compute the amount of Acnologias's long-term liabilities that would be reported in a December 31, 2020, consolidated balance sheet. Multiple Choice $1,850. $1,750. $1,700. $1,800. $1,900
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