REFERENCE: Ref.05_02 On January 1,2009,Pride,Inc.bought 80% of the Outstanding Voting Common Stock

question 78

Multiple Choice

REFERENCE: Ref.05_02
On January 1,2009,Pride,Inc.bought 80% of the outstanding voting common stock of Strong Corp.for $364,000.Of this payment,$28,000 was allocated to equipment (with a five-year life) that had been undervalued on Strong's books by $35,000.Any remaining excess was attributable to goodwill which has not been impaired.
As of December 31,2009,before preparing the consolidated worksheet,the financial statements appeared as follows:
During 2009,Pride bought inventory for $112,000 and sold it to Strong for $140,000.Only half of this purchase had been paid for by Strong by the end of the year.60% of these goods were still in the company's possession on December 31.
-What is the consolidated total for equipment (net) at December 31,2009?

• A)$952,000.
• B)$1,058,400.
• C)$1,069,600.
• D)$1,064,000.
• E)$1,066,800.

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