On January 1, 2013, the Moody Company Entered into a Transaction

question 48

Multiple Choice

On January 1, 2013, 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 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: $\begin{array}{lrr}&\text { Moody }& \text { Osorio }\\\text { Cash } & \$ 180 & \$ 40 \\\text { Receivables } & 810 & 180 \\\text { Inventories } & 1,080 & 280 \\\text { Land } & 600 & 360 \\\text { Buildings (net) } & 1,260 & 440 \\\text { Equipment (net) } & 480 & 100\\\text { Accounts payable } & (450) \\\text { Long-term liabilities } & (1,290) \\\text { Common stock }(\$ 1 \text { par }) &(330) \\\text { Common stock }(\$ 20 \text { par }) &&(240) \\\text { Additional paid-in capital } & (1,080) &(340) \\\text { Retained earnings } & (1,260) &(340) \end{array}$ 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:

Strategic Levers

Tools or mechanisms that can be utilized to influence the direction or outcome of strategic planning and decision-making.

Appreciative Moves

are actions taken to recognize or enhance the positive aspects of a situation, often used in negotiation or conflict resolution to build rapport.

Power Moves

Strategic actions taken to assert dominance or influence over others in a negotiation or social interaction.

Ultimatum

A final demand or statement of terms, the rejection of which will result in retaliation or a breakdown in relations.