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Answers given. Can you please explain the calculations. The following information applies: Huey Company acquires 100% of the stock of Solar Corporation on January 1,

Answers given. Can you please explain the calculations.

The following information applies:

Huey Company acquires 100% of the stock of Solar Corporation on January 1, 2019, for $2,400,000 cash. As of that date Solar had the following account balances:

Book Value

Fair value

Cash

$300,000

$300,000

Accounts receivable

325,000

325,000

Inventory

350,000

$400,000

Building-net (10 year life)

1,000,000

900,000

Equipment-net (5 year life)

300,000

400,000

Land

600,000

900,000

Accounts Payable

125,000

125,000

Bonds Payable (Face amount $1,000,000; due 12/31/2023)

2,000,000

2,050,000

Common stock

700,000

Additional paid-in capital

250,000

Retained earnings

880,000

In 2019 and 2020, Solar had net income of $250,000 and $240,000, respectively. In addition, Solar paid dividends of $16,000 in both years. Inventory is assumed to be sold in 2019. Assume straight line amortization/ depreciation for assets and bonds payable.

30. Compute the AAP amortization for 2019.

a. $50,000

31. What amount of Solar's Bonds Payable would appear on the consolidated balance sheet at December 31, 2019?

b. $2,040,000

32. What amount of Solar's building would be included on the consolidated balance sheet at December 31, 2020?

c. $920,000

33. What amount of Solar's equipment would be included on the consolidated balance sheet at December 31, 2020?

c. $360,000

28. What amount of Solars building would be included on the consolidated balance sheet at December 31, 2019?

a. $990,000

b. $880,000

c. $890,000

d. $910,000

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