The Balance Sheet of Mini Company Was as Follows Immediately

question 29

Multiple Choice

The balance sheet of Mini Company was as follows immediately before it was acquired by Maxi Company:

$\begin{array}{l}\begin{array} { l } \text { Cash } &&&&&& \$ 90,000 \\\text { Accounts receivable (net) }&&&&&&50,000 \\\text { Inventory } &&&&&&150,000 \\\text { Plant and equipment (net) } &&&&&&100,000 \\\text { Total Assets } &&&&&&\$ 390,000\end{array}\\\begin{array} { l } \text { Accounts payable } & \$ 40,000 \\\text { Notes payable } & 80,000 \\\text { Common stock } & 155,000 \\\text { Retained earnings } & 115,000 \\\text { Total Liabilities and Stockholders' Equity } & \$ 390,000\end{array}\end{array}$
On January 1,2010,Maxi Company paid $350,000 in cash for 100% of the outstanding common stock of Mini Company.The current market value of Mini Company's plant and equipment was $140,000 on the date of acquisition.If the market value and book value are the same for Mini's remaining assets,what is the net increase in Maxi's assets as a result of the merger with Mini?

• A)$430,000
• B)$470,000
• C)$120,000
• D)$390,000

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Definitions:

Negative Reinforcement

a behavior modification technique where the removal of an undesirable or unpleasant outcome after the display of a desired behavior increases the likelihood of the behavior being repeated.

Spontaneous Recovery

The reappearance of a previously extinguished conditioned response after a period without exposure to the conditioned stimulus.

Stimulus Generalization

The process by which a conditioned response becomes associated with stimuli that are similar but not identical to the original conditioned stimulus.

Conditioned Response

A learned response to a previously neutral stimulus that has been repeatedly presented along with an unconditioned stimulus.