On January 1,20X9,Pirate Corporation Acquired 80 Percent of Sea-Gull Company's

question 4

Multiple Choice

On January 1,20X9,Pirate Corporation acquired 80 percent of Sea-Gull Company's common stock for $160,000 cash.The fair value of the noncontrolling interest at that date was determined to be $40,000.Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:
At the date of the business combination,the book values of Sea-Gull's net assets and liabilities approximated fair value except for inventory,which had a fair value of $45,000,and land,which had a fair value of $60,000.
-Based on the preceding information,what amount of total liabilities will be reported in the consolidated balance sheet prepared immediately after the business combination?

• A)$395,000
• B)$280,000
• C)$275,000
• D)$195,000

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Definitions:

Scrotum

A pouch of skin containing the testicles and part of the spermatic cord, providing a cooler environment essential for sperm production.

Vasectomy

A surgical procedure for male sterilization or permanent contraception, involving the cutting and sealing of part of each vas deferens.

Sperm

Male reproductive cells capable of fertilizing a female's egg.

Urethra

The tube that conveys urine from the bladder to the outside of the body in both sexes, and also transports semen in the male reproductive system.