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Jackson Company acquires 100% of the stock of Clark Corporation on January 1, 2020, for $4,100 cash. As of that date Clark has the following
Jackson Company acquires 100% of the stock of Clark Corporation on January 1, 2020, for $4,100 cash. As of that date Clark has the following trial balance: Debit Credit Cash $ 500 Accounts receivable 600 Inventory 900 1,600 Buildings (net) (5 year life) Equipment (net) (2 year life) Land 1,000 900 Accounts payable 400 Long-term liabilities (due 12/31/22) 1,900 Common stock 1,000 Additional paid-in capital 700 Retained earnings 1,500 Total $5,500 $5,500 Net income and dividends reported by Clark for 2020 and 2021 follow: 2020 2021 Net income $120 $140 Dividends 40 50 The fair value of Clark's net assets that differ from their book values are listed below: Fair Value Buildings $1,200 Equipment 1,350 Land 1,300 Long-term liabilities 1,750. $ Any excess of consideration transferred over fair value of net assets acquired is considered goodwill with an indefinite life. Compute the amount of Clark's inventory that would be reported in a January 1, 2020, consolidated balance sheet. Multiple Choice $0. $100. $400. $550. $900. O O O
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