Prime Company Acquired 100 Percent of the Voting Common Shares

question 52

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 liabilities was reported in the consolidated balance sheet immediately after acquisition?

• A)$500,000
• B)$530,000
• C)$280,000
• D)$660,000

Explain the concept of the value frontier and its significance in marketing strategy.

Understand the dynamics of product positioning on a value map.

Understand the implications of strategic choices on a firm's competitive positioning.

Understand the role and function of different micronutrients in plant physiology.

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Definitions:

Equity Method

An accounting technique used to record investments in associate companies where the investor has significant influence, typically reflected by owning 20%-50% of voting stock.

Acquisition Method

A set of procedures used in accounting to consolidate the financial statements of a parent company and its subsidiaries.

Consolidated Revenues

The total earnings generated by a company and its subsidiaries, reported together as a single figure.

Partial Equity Method

The partial equity method is an accounting approach used when an investing company has significant influence, but not full control, over an investee, recognizing income to the extent dividends are received.