Use the following to answer questions 7-9: On December 31, 2001, Reston Corporation held the following noncurrent assets: a building worth $360,000 (the cost less accumulated depreciation equaled $300,000) and land worth $180,000 (the cost totaled $140,000). The remaining net assets, all current assets, were worth $380,000; the book value of those assets totaled $360,000. On this date, Columbia Company purchased all of Reston's common stock for $880,000. 7. Based on the information given above, at what amounts will Reston's building and land be reported in the consolidated balance sheet prepared at the date of combination? Building Land A $360,000 $180,000 B) $300,000 $140,000 C) $320,000 $180,000 D) $333,334 $166,666 a The Bldg. and Land are reported at their full fair values. This is thus a gimme. 8. Any residual credit differential (i.e. after fair value increments have been allocated) arising from a purchase acquisition should be allocated to: A) noncurrent nonfinancial assets reported at fair value. B) noncurrent assets including marketable securities. total assets other than marketable securities. total assets including marketable securities. E) gain. Consider the above info. Our cost is 880; our share of the sub's nby is 800. Differential is thus 80. Subtract our share of the fv increment: fy nbv diff=allocated bldg 360 300 60 land 180 140 40 cur.assets 380 360 20 total So 80 - 120 = (40), a residual differential that is reported as a gain. 120 9. Assume the information given above, except assume that the purchase price is $940,000. At what amounts will the building and land be reported in the consolidated balance sheet immediately following the combination? Building Land A) $360,000 $180,000 $300,000 $140,000 $320,000 $180,000 D) $333,334 $166,666 a