Fact Pattern: Palmito Co. acquired 90% of the outstanding stock of the Slaughter Co. for $250,000 in cash. Palmito had no previous equity interest in Slaughter. Slaughter's identifiable assets acquired and liabilities assumed were reported at their acquisition-date fair values in its separate balance sheet immediately following the acquisition. Slaughter's accounts receivable include a $10,000 receivable from Palmito Slaughter also has a $5,000 account payable to Palmito. Palmito's separate balance sheet and the consolidated balance sheet immediately following the acquisition are presented below Current assets Palmito Consolidated $220,000 $340,000 Investment in Slaughter 250,000 Fixed assets 410,000 575,000 Goodwill 25,000 $880,000 $940,000 Current liabilities $105,000 $140,000 Common stock 400,000 400,000 Additional paid-in capital 75,000 75,000 Retained earnings 300,000 300,000 Noncontrolling interest 25,000 $880,000 $940,000 What was the total of Slaughter's current liabilities on its separate balance sheet at the time of the acquisition? A. $50,000 O B. $35,000 C. $40,000 OD. $45,000

Fact Pattern: Palmito Co. acquired 90% of the outstanding stock of the Slaughter Co. for $250,000 in cash. Palmito had no previous equity interest in Slaughter. Slaughter's identifiable assets acquired and liabilities assumed were reported at their acquisition-date fair values in its separate balance sheet immediately following the acquisition. Slaughter's accounts receivable include a $10,000 receivable from Palmito Slaughter also has a $5,000 account payable to Palmito. Palmito's separate balance sheet and the consolidated balance sheet immediately following the acquisition are presented below Current assets Palmito Consolidated $220,000 $340,000 Investment in Slaughter 250,000 Fixed assets 410,000 575,000 Goodwill 25,000 $880,000 $940,000 Current liabilities $105,000 $140,000 Common stock 400,000 400,000 Additional paid-in capital 75,000 75,000 Retained earnings 300,000 300,000 Noncontrolling interest 25,000 $880,000 $940,000 What was the total of Slaughter's current liabilities on its separate balance sheet at the time of the acquisition? A. $50,000 O B. $35,000 C. $40,000 OD. $45,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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