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On January 1, 2020, Finch Corporation purchased 75% of the common stock of Grass Co. Separate balance sheet data for the companies at the combination
On January 1, 2020, Finch Corporation purchased 75% of the common stock of Grass Co. Separate balance sheet data for the companies at the combination date are given below: Cash Accounts Receivable Inventory Land Plant assets Accum. Depreciation Investment in Lapp Total assets Finch $24,000 144,000 132,000 68,000 700,000 _(240,000) 392,000 $1,230,000 Grass $206,000 26,000 38,000 32,000 300,000 (60,000) $542,000 Accounts payable Capital stock Retained earnings Total liabilities & equities $ 206,000 800,000 224,000 $1.230.000 $142,000 300,000 100,000 $542.000 At the date of combination, the book values of Grass's net assets were equal to the fair value except for Grass's inventory, which had a fair value of $60,000. Determine below what the consolidated balance would be for each of the requested accounts. 3. What amount of Inventory will be reported? a. $170,000. b. $169,000. c. $186,500. d. $192,000. 4. What amount of Goodwill will be reported? a. $10,500. b. $20,000. c. $75,500. d. $100,667
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