Prime Company Acquired 100 Percent of the Voting Common Shares

question 37

Multiple Choice

Prime Company acquired 100 percent of the voting common shares of Standard Video Corporation,its bitter rival,by issuing bonds with a par value and fair value of $150,000.Immediately prior to the acquisition,Prime reported total assets of $500,000,liabilities of $280,000,and stockholders' equity of $220,000.At that date,Standard Video reported total assets of $400,000,liabilities of $250,000,and stockholders' equity of $150,000.Included in Standard's liabilities was an account payable to Prime in the amount of $20,000,which Prime included in its accounts receivable.
-Based on the preceding information,what amount of total assets was reported in the consolidated balance sheet immediately after acquisition?

• A)$650,000
• B)$880,000
• C)$920,000
• D)$750,000

Understand how pension programs and employment contracts can adjust to changes in the price level.

Recognize the social and economic costs of unemployment.

Understand the difference between ordinary annuities and annuities due and their valuation.

Calculate time required for investment growth under constant growth rates.

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Definitions:

Explanation

A statement or account that makes something clear by describing it in more detail or revealing relevant facts or ideas.

Argument

A set of statements or reasons put forward to support a conclusion.

Liquid Water

The fluid phase of water, characterized by its capacity to flow and adapt to the shape of its container.

Logical Strength

The degree to which the premises of an argument support its conclusion; stronger arguments provide greater justification for their conclusions.