On January 1, 2014, Palk Corp On January 2, 2014, Palk Borrowed the Entire $84,000 It

question 36

Multiple Choice

On January 1, 2014, Palk Corp. and Spraz Corp. had condensed balance sheets as follows: $\begin{array}{|l|c|c|}\hline &\text { Palk Corp. } & \text { Spraz Corp. } \\\hline \text { Current assets } & \$ \quad 99,000 & \$ 28,000 \\\hline \text { Noncurrent assets } & \$ 125,000 & \$ 56,000 \\\hline \text { Total assets } & \$ \quad 224,000 & \$ 84,000 \\\hline \text { Current liabilities } & \text { S } \quad 42,000 & \$ 14,000 \\\hline \text { Long-term debt } & \$ 70,000 & \$ \text { - } \\\hline \text { Stockholders' equity } & \$ 112,000 & \$70,000 \\\hline \text { Total liabilities and stockholders' equity } & \$ 224,000 & \$ 84,000 \\\hline\end{array}$ On January 2, 2014, Palk borrowed the entire $84,000 it needed to acquire 80% of the outstanding common shares of Spraz. The loan was to be paid in ten equal annual principal payments, plus interest, beginning December 31, 2014. 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 current assets at January 2, 2014?

• A)$127,000.
• B)$129,800.
• C)$143,800.
• D)$148,000.
• E)$135,400.

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Definitions:

Enantiomeric

Referring to each of a pair of molecules that are mirror images of each other but cannot be superimposed, just like left and right hands.

Mixture

A combination of two or more substances in which each substance retains its own chemical identity and properties.

Structural Rearrangement

A process involving changes in the arrangement of atoms within a molecule, leading to the formation of a different structural isomer.

Cations

Positively charged ions that have more protons than electrons, resulting from the loss of one or more electrons.