On January 1, 2019, Palk Corp

question 78

Multiple Choice

On January 1, 2019, Palk Corp. and Spraz Corp. had condensed balance sheets as follows: On January 2, 2019, Palk borrowed the entire $84,000 it needed to acquire 80% of the outstanding common shares of Spraz. Shares of Spraz are not actively traded on the market. The loan was to be paid in ten equal annual principal payments, plus interest, beginning December 31, 2019. The excess consideration transferred over the underlying book value of the acquired net assets was allocated 60% to inventory and 40% to goodwill.What is consolidated stockholders' equity at January 2, 2019?

• A)$112,000.
• B)$133,000.
• C)$168,000.
• D)$182,000.
• E)$203,000.

---

Definitions:

Goodwill

An intangible asset reflecting the value of a business's reputation, brand, and continuing customer relationships.

Drafting

The preliminary stage of writing where ideas are developed and plans are made for the structure and content of a document.

Feedback

Information provided regarding aspects of one’s performance or understanding, aimed at improving future efforts.

Revising

The process of reviewing, altering, and amending a piece of text or any other work, with the intention of improving it.