Use the Following Information to Answer Question(s) Below

question 5

Multiple Choice

Use the following information to answer question(s) below.

On January 1, 2014, Punch Corporation purchased 80% of the common stock of Soopy Co. Separate balance sheet data for the companies at the acquisition date (after the acquisition) are given below:

-What amount of total liabilities will be reported?

• A)$206,000
• B)$278,400
• C)$319,600
• D)$348,000

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Definitions:

Trade Creditors

Trade creditors refer to suppliers from whom a business has purchased goods or services on credit, payable within a short period, typically less than one year.

Credit Checks

A review of an individual's or company's financial history, often performed by a lender or financial institution, to assess the risk of lending money or extending credit.

Interest-bearing Asset

A type of investment that earns interest over time, such as savings accounts, certificates of deposit, and bonds.

Default Risk

The risk that a borrower will not make the required payments on a debt.