On January 1, 2021, the Moody Company Entered into a Transaction

question 29

Multiple Choice

On January 1, 2021, the Moody Company entered into a transaction for 100% of the outstanding common stock of Osorio Company. To acquire these shares, Moody issued $400 in long-term liabilities and also issued 40 shares of common stock having a par value of $1 per share but a fair value of $10 per share. Moody paid $20 to lawyers, accountants, and brokers for assistance in bringing about this acquisition. Another $15 was paid in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows: Note: Parentheses indicate a credit balance.In Moody's appraisal of Osorio, three assets were deemed to be undervalued on the subsidiary's books: Inventory by $10, Land by $40, and Buildings by $60.Compute the amount of consolidated land at date of acquisition.

• A)$1,000.
• B)$960.
• C)$920.
• D)$400.
• E)$320.

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Definitions:

Lower Income Strata

A demographic group that earns significantly less income than the average, often facing economic challenges and reduced access to resources.

Trivial Matters

Issues or subjects that are of little importance or significance.

Stalking

Persistent and unwanted attention by one individual towards another, leading to fear or distress.

Counteract

To act against something to reduce its force or neutralize its effects.