Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help, 3- On January 1, 2021, the Moody Company entered into a transaction for 100% of the outstanding common stock of Osorio Company. To

Please help,

3- On January 1, 2021, the Moody Company entered into a transaction for 100% of the outstanding common stock of Osorio Company. To acquire these shares, Moody issued $400 in long-term liabilities and also issued 40 shares of common stock having a par value of $1 per share but a fair value of $10 per share. Moody paid $20 to lawyers, accountants, and brokers for assistance in bringing about this acquisition. Another $15 was paid in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows:

Moody Osorio
Cash $ 180 $ 40
Receivables 810 180
Inventories 1,080 280
Land 600 360
Buildings (net) 1,260 440
Equipment (net) 480 100
Accounts payable (450 ) (80 )
Long-term liabilities (1,290 ) (400 )
Common stock ($1 par) (330 )
Common stock ($20 par) (240 )
Additional paid-in capital (1,080 ) (340 )
Retained earnings (1,260 ) (340 )

Note: Parentheses indicate a credit balance.

In Moody's appraisal of Osorio, three assets were deemed to be undervalued on the subsidiary's books: Inventory by $10, Land by $40, and Buildings by $60.

Compute the amount of consolidated inventories at date of acquisition.

Multiple Choice

  • $1,080.

  • $1,350.

  • $1,360.

  • $1,370.

  • $290.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essentials Of Accounting For Governmental And Not For Profit Organizations

Authors: John Engstrom, Paul Copley

6th Edition

0072411724, 9780072411720

More Books

Students also viewed these Accounting questions