The Following Information Applies to Questions 41-45

question 34

Multiple Choice

The following information applies to Questions 41-45
On January 1, 20X6, Polka Co. (Polka) and Strauss Co. (Strauss) had condensed balance sheets as follows:
On January 2, 20X6, Polka borrowed $90,000 and used the proceeds to acquire 90% of the outstanding common shares of Strauss. This debt is payable in ten equal annual principal and accrued interest payments beginning December 30, 20X6. On the acquisition date, the fair value of Strauss was $100,000, and the excess cost of the investment over Strauss's carrying amount of acquired net assets should be allocated 60% to inventory and 40% to goodwill.
-Current assets on the January 2,20X6,consolidated balance sheet should be:

• A) $79,000
• B) $120,000
• C) $90,000
• D) $96,000

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Definitions:

Social Conditions

The circumstances and factors that influence the quality of life and opportunities available to people within a society.

Gilded Age

A term describing the late 19th century in the United States, characterized by rapid economic growth, material excess, and widespread political corruption.

Second Industrial Revolution

A period of rapid industrial growth and technological advancement in the late 19th and early 20th centuries, marked by the widespread use of steel, electric power, and internal combustion engines.

Trans-Mississippi West

The region of the United States that lies west of the Mississippi River, an area that experienced significant settlement and development during the 19th and early 20th centuries.