Princeton Company Acquired 75 Percent of the Common Stock of Sheffield

question 19

Multiple Choice

Princeton Company acquired 75 percent of the common stock of Sheffield Corporation on December 31,20X9.On the date of acquisition,Princeton held land with a book value of $150,000 and a fair value of $300,000; Sheffield held land with a book value of $100,000 and fair value of $500,000.Using the entity theory,at what amount would land be reported in a consolidated balance sheet prepared immediately after the combination?

• A) $650,000
• B) $500,000
• C) $550,000
• D) $375,000

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Definitions:

Seasonal Discounts

Price reductions offered on products or services during specific seasons or times of the year to boost sales or clear inventory.

Encourage Buyers

The practice of motivating potential customers to purchase a product or service through various strategies, including marketing, promotions, and incentives.

Stock Inventory

A detailed list of goods or materials a company has in stock, a critical component for managing supply chain and meeting customer demand.

Trade Terms

Agreed conditions between a buyer and a seller regarding the delivery, payment, and ownership of goods.