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Is this none of the above? Vader Company purchased 100 percent of the common shares of Skywalker Company by issuing shares of common stock valued
Is this none of the above?
Vader Company purchased 100 percent of the common shares of Skywalker Company by issuing shares of common stock valued at $900,000. Selected accounts from Vader's balance sheet at the date of combination are as follows: Inventory $700,000 Building and Equipment (net) 1,400,000 Common Stock 840,000 Retained Earnings 2,000,000 Selected accounts from the balance sheet of Skywalker at acquisition are as follows: Inventory $200,000 Building and Equipment (net) 900,000 450,000 Common Stock Additional Paid-In Capital 450,000 Retained Earnings (50,000) On the date of purchase, Skywalker's inventory and buildings and equipment had fair values of $255,000 and $870,000, respectively. Based on the information given above, the amount to be reported for retained earnings in the consolidated balance sheet immediately after the combination is: 1. $2,000,000 2. $1,100,000 3. $1,600,000 4. $1,940,000 5. None of the aboveStep by Step Solution
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