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On January 1, 2010, Palk Corp. and Spraz Corp. had condensed balance sheets as follows: Palk Corp. Spraz Corp. Current assets $ 99,000 $ 28,000

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On January 1, 2010, Palk Corp. and Spraz Corp. had condensed balance sheets as follows: Palk Corp. Spraz Corp. Current assets $ 99,000 $ 28,000 Noncurrent assets $ 125,000 $ 56,000 Total assets $ 224,000 $ 84,000 14,000 Current liabilities $ 42,000 Long-term debt $ 70,000 Stockholders' equity $ 112,000 Total liabilities and stockholders' equity $ 224,000 $ $ $ $ 70,000 84,000 On January 2, 2010, Palk borrowed the entire $84,000 it needed to acquire 80% of the outstanding common shares of Spraz. The loan was to be paid in ten equal annual principal payments, plus interest, beginning December 31, 2010. The excess consideration transferred over the underlying book value of the acquired net assets was allocated 60% to inventory and 40% to goodwill. What is consolidated current assets at January 2, 2010? A. $127.000 B. $129,800. C. $143,800 D. $148,000. E. $135,400. by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2010. Demers reported excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired. Demers earns income and pays dividends as follows: 2010 2011 2012 Net income $100,000 $120,000 $130,000 Dividends 40,000 50,000 60,000 Assume the equity method is applied. Compute Pell's investment in Demers at December 31, 2010. A. $580,000 3. $574,400. C. $548,000. . $542,400. E. $541,000. by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2010. Demers reported excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired. Demers earns income and pays dividends as follows: 2010 2011 2012 Net income $100,000 $120,000 $130,000 Dividends 40,000 50,000 60,000 Assume the equity method is applied. Compute Pell's investment in Demers at December 31, 2010. A. $580,000 3. $574,400. C. $548,000. . $542,400. E. $541,000

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