Question
Koch acquired 100% of O'Bannon on January 1, 2016. The transaction was not a bargain purchase. On the acquisition date, O'Bannon's Inventory had a book
Koch acquired 100% of O'Bannon on January 1, 2016. The transaction was not a bargain purchase. On the acquisition date, O'Bannon's Inventory had a book value of 49,228 and a fair value of 27,009. No intercompany inventory transaction occurred during 2016. Koch and O'Bannon both use the FIFO inventory cost flow assumption.
O'Bannon's inventory turns over approximately 10 times per year. What adjustment to Inventory must be made when preparing Koch's consolidated financial statements as of 12/31/2016?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Accounting Principles
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
13th edition
978-1119411482
