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

question 13

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 consolidated retained earnings will be reported immediately after the business combination?

• A)$205,000
• B)$120,000
• C)$325,000
• D)$310,000

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Definitions:

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