Ch5

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ch5
Student: ___________________________________________________________________________

Bristle Corporation acquired 75 percent of Silver Corporation's common stock on December 31, 20X8, for $300,000. The fair value of the noncontrolling interest at that date was determined to be $100,000. Silver's balance sheet immediately before the combination reflected the following balances:

A careful review of the fair value of Silver's assets and liabilities indicated that inventory, land, and buildings and equipment (net) had fair values of $65,000, $100,000, and, $300,000 respectively. Goodwill is assigned proportionately to Bristle and the noncontrolling shareholders. 1.
Based on the preceding information, what amount of inventory will
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A consolidated balance sheet was prepared immediately. Partial balance sheet data for the two companies and the consolidated entity at that date follow:

During 20X8, X Company provided consulting services to Y Company and has not yet been paid for them. There were no other receivables or payables between the companies at December 31, 20X8. 14.
Based on the information given, what is the amount of unpaid consulting services at December 31, 20X8, on work done by X Company for Y Company?

A.
$0

B.
$10,000

C.
$5,000

D.
$15,000

15.
Based on the information given, what balance in accounts receivable did Y Company report at December 31, 20X8?

A.
$28,000

B.
$48,000

C.
$40,000

D.
$38,000

16.
Based on the information given, X Company and Y Company reported wages payable of

A.
$50,000 and $28,000 respectively.

B.
$60,000 and $32,000 respectively.

C.
$40,000 and $35,000 respectively.

D.
$28,000 and $60,000 respectively.

17.
Based on the information given, what was the fair value of Y Company as a whole at the date of acquisition?

A.
$155,000

B.
$110,000

C.
$115,000

D.
$135,000

18.
Based on the information given, what percentage of Y Company's shares were acquired by X Company?

A.
100 percent

B.
60 percent

C.
80 percent

D.
75 percent

19.
Based on the information given, what amount will be reported as total controlling
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