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

question 36

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 inventories at date of acquisition.

• A)$1,080.
• B)$1,350.
• C)$1,360.
• D)$1,370.
• E)$290.

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Definitions:

Imagined Events

Events that occur only in the mind or thought, not in physical reality.

Hypnotic Suggestion

A therapy technique in which individuals are guided into hypnosis and given suggestions intended to alter their perceptions, emotions, or behaviors.

Déjà Vu

The eerie sensation of having already experienced a present situation, despite it ostensibly being new.

Familiarity

A sense of recognition or understanding of something or someone due to previous exposure or experience.