Ponti Company Purchased the Net Assets of the Sorri Company

question 39

Multiple Choice

Ponti Company purchased the net assets of the Sorri Company for $800,000.The book value of the net assets of Sorri Company were as follows on the acquisition date:
$$\begin{array} { l r } \text { Cash } & \$ 50,000 \\\text { Inventory } & 150,000 \\\text { Land } & 150,000 \\\text { Building (net) } & 400,000 \\\text { Liabilities } & ( 200,000 ) \\\quad \text { Net assets } & \$ 550,000 \\\end{array}$$ The market values were as follows: Inventory, $160,000; Land, $170,000; Building, $450,000.The excess purchase price is allocated to goodwill.On the consolidated statement of cash flows, what is the amount that will appear as cash applied to investing as a result of this purchase?

• A)$800,000
• B)$720,000
• C)$750,000
• D)$670,000

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