The following data applies to Questions 1 7:

Paccu Corporation acquired 100 percent of Sallee Companys common stock on January 1, 20X7. Balance sheet data for the two companies immediately following the acquisition follow:

Paccu Sallee

Cash $50,000 $30,000

Accounts Receivable 60,000 35,000

Inventory 130,000 45,000

Land 75,000 60,000

Buildings and Equipment 310,000 170,000

Less: Accumulated Depreciation (130,000) (30,000)

Investment in Sallee Company Stock 250,000

Total Assets $745,000 $310,000

Accounts Payable $40,000 $35,000

Taxes Payable 30,000 12,000

Bonds Payable 250,000 50,000

Common Stock 75,000 75,000

Retained Earnings 350,000 138,000

Total Liabilities and Stockholders Equity $745,000 $310,000

At the date of the business combination, the book values of Sallees assets and liabilities approximated fair value except for inventory, which had a fair value of $55,000, and land, which had a fair value of $65,000. The fair value of land for Paccu Corporation was estimated at $90,000 immediately prior to the acquisition.

1. Based on the preceding information, at what amount should the land be reported in the consolidated balance sheet prepared immediately after the business combination?

A. $135,000

B. $140,000

C. $150,000

D. $155,000

2. Based on the preceding information, what amount of total assets will appear in the consolidated balance sheet prepared immediately after the business combination?

A. $745,000

B. $805,000

C. $830,000

D. $842,000

3. Based on the preceding information, what is the differential associated with the acquisition?

A. $15,000

B. $20,000

C. $22,000

D. $37,000

4. Based on the preceding information, what amount of goodwill will be reported in the consolidated balance sheet prepared immediately after the business combinations?

A. $37,000

B. $22,000

C. $15,000

D. $0,000

5. Based on the preceding information, what amount of liabilities will be reported in the consolidated balance sheet prepared immediately after the business combination?

A. $300,000

B. $320,000

C. $417,000

D. $745,000

6. Based on the preceding information, what amount of retained earnings will be reported in the consolidated balance sheet prepared immediately after the business combination?

A. $200,000

B. $212,000

C. $350,000

D. $488,000

7. Based on the preceding information, what amount of total stockholders equity will be reported in the consolidated balance sheet prepared immediately after the business combination?

A. $213,000

B. $350,000

C. $425,000

D. $638,000