5. Pepper Company paid $3,500,000 for the net assets of Salt Corporation, and Salt was then dissolved. Salt had no liabilities. The fair values of Salt's assets were $4,750,000. Salt's only non-current assets were land and buildings with book values of $200,000 and $620,000, respectively, and fair values of $280,000 and $910,000, respectively. At what value will the buildings be recorded by Pepper? *

$280,000

$620,000

$290,000

$910,000

None of the above

6. During its inception, Devon Company purchased land for $100,000 and a building for $180,000. After exactly 3 years, it transferred these assets and cash of $50,000 to a newly created subsidiary, Regan Company, in exchange for 15,000 shares of Regan's $10 par value stock. Devon uses the straight-line method for depreciation. The useful life for the building is 30 years with zero residual-salvage value. An appraisal revealed that the building has a fair value of $200,000. Based on the information provided, what amount would be reported by Devon Company as investment in Regan Companys common stock? *

$312,000

$180,000

$330,000

$150,000

None of the above

7. On December 31, 2018, Sam Corporation was merged into Poe Corporation. In the business combination, Poe issued 400,000 shares of its $10 par common stock, with a market price of $20 a share, for all of Sams common stock. The stockholders equity section of each companys balance sheet immediately before the combination was as shown below.

What would be the amount of the consolidated additional paid-in capital that should be reported at December 31, 2018? *

$17,800,000

$8,000,000

$6,300,000

$2,300,000

None of the above

8. On January 1, 2017, Yang Corporation acquired 25 percent of the outstanding shares of Spiel Corporation for $100,000 cash. Spiel Company reported net income of $75,000 and paid dividends of $30,000 for both 2017 and 2018. The fair value of shares held by Yang was $110,000 and $105,000 on December 31, 2017 and 2018, respectively. What amount will be reported by Yang as income from its investment in Spiel for 2018, if it used the equity method of accounting? *

$7,500

$11,250

$26,250

$18,750

None of the above