On January 1,20X9,Paradox Company Acquired All of Sirius Company's Common

question 31

Multiple Choice

On January 1,20X9,Paradox Company acquired all of Sirius Company's common shares,for $365,000 cash.On that date,Sirius's balance sheet appeared as follows:
The fair values of all of Sirius's assets and liabilities were equal to their book values except for inventory that had a fair value of $85,000,land that had a fair value of $60,000,and buildings and equipment that had a fair value of $250,000.Buildings and equipment have a remaining useful life of 10 years with zero salvage value.Paradox Company decided to employ push-down accounting for the acquisition.Subsequent to the combination,Sirius continued to operate as a separate company.
-Based on the preceding information,what amount will be present in the revaluation capital account,when consolidating entries are prepared?

• A)$0
• B)$65,000
• C)$60,000
• D)$15,000

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Definitions:

Satisfaction Deficit

A state where an individual's or group's needs, expectations, or desires are not met, leading to a sense of dissatisfaction.

Theory Y

Assumes people are willing to work, accept responsibility and are self‐directed and creative.

McGregor

Refers to Douglas McGregor's theories X and Y, which are concepts in management and motivation theory that describe two contrasting models of workforce motivation applied by managers in human resource management, organizational behavior, and organizational development.

Self-Direction

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