Question
On January 1, 2022, Top, Inc. acquired 70% of the outstanding voting common stock of Bottom Corp. for $320,000. There is no active market for
On January 1, 2022, Top, Inc. acquired 70% of the outstanding voting common stock of Bottom Corp. for $320,000. There is no active market for Bottom's stock. Of this payment, $35,000 was allocated to equipment (with a five-year life) that had been undervalued on Bottom's books by $50,000. Any remaining excess was attributable to trademark with indefinite useful life. As of December 31, 2022, before preparing the consolidated worksheet, the financial statements appeared as follows:
Account Title | Top Inc. | Bottom Corp. |
Sales Revenues | (380,000) | (280,000) |
Cost of Goods Sold | 190,000 | 112,000 |
Operating expenses | 20,000 | 14,000 |
Net Income | (170,000) | (154,000) |
What is the total of consolidated operating expenses?
A. $49,000. | ||
B. $41,000. | ||
C. $34,000. | ||
D. $44,000. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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