Question
DataCloud purchased all of the shares of Supercore for $30 million in cash. The balance sheets of DataCloud and Supercore just after the acquisition appear
DataCloud purchased all of the shares of Supercore for $30 million in cash. The balance sheets of DataCloud and Supercore just after the acquisition appear below, along with fair value information for Supercore's net assets.
|
| DataCloud | Supercore |
|
| Book Value | Book Value | Fair Value |
|
| Dr (Cr) |
| Current assets | $ 10,000,000 | $ 5,000,000 | $ 4,000,000 |
| Plant assets | 40,000,000 | 36,000,000 | 25,000,000 |
| Identifiable intangible assets | -- | -- | 10,000,000 |
| Investment in Supercore | 30,000,000 | -- | -- |
| Liabilities | (35,000,000) | (37,800,000) | (37,500,000) |
| Capital stock | (30,000,000) | (5,000,000) |
|
| Retained earnings | (15,600,000) | 1,500,000 |
|
| Treasury stock | 100,000 | 100,000 |
|
| Accumulated other comprehensive loss | 500,000 | 200,000 |
|
| Total | $ 0 | $ 0 |
|
On the consolidated balance sheet at the date of acquisition, what is the balance for retained earnings?
A. $14,100,000
B. $17,100,000
C. $15,600,000
D. $0
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Auditing And Assurance Services
Authors: Robert Ramsay, Timothy J Louwers
4th Edition
007739657X, 978-0077396572
