ACC-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(20Year life)200,000 300,000

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

0 $ 10,000

0 $ 0

0 $ 90,000

0 $ 40,000

0 $ 50,000