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Varton Corp

question 20

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Varton Corp.acquired all of the voting common stock of Caleb Co.on January 1, 2018.Varton owned some land with a book value of $84,000 that was sold to Caleb for its fair value of $120,000.How should this transfer be accounted for by the consolidated entity?


Definitions:

Divisible

Capable of being divided or separated into smaller parts without losing its inherent qualities or value.

Utils

A hypothetical unit of measurement used in economics to quantify the level of utility or satisfaction derived from consuming goods or services.

Pairs of Socks

Multiple sets of soft foot garments, each set consisting of two items, typically worn for warmth, comfort, or hygiene reasons.

Opportunity Cost

The expense incurred by not choosing the second-best option available during decision-making.

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