REFERENCE: Ref.03_11 Prince Company Acquires Duchess,Inc.on January 1,2009.The Consideration Transferred Exceeds the Exceeds

question 59

Multiple Choice

REFERENCE: Ref.03_11
Prince Company acquires Duchess,Inc.on January 1,2009.The consideration transferred exceeds the fair value of Duchess' net assets.On that date,Prince has a building with a book value of $1,200,000 and a fair value of $1,500,000.Duchess has a building with a book value of $400,000 and fair value of $500,000.
-If push-down accounting is used,what amounts in the Building account appear on Duchess' separate balance sheet and on the consolidated balance sheet immediately after acquisition?

• A)$400,000 and $1,600,000.
• B)$500,000 and $1,700,000.
• C)$400,000 and $1,700,000.
• D)$500,000 and $2,000,000.
• E)$500,000 and $1,600,000.

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Definitions:

Peace of Augsburg

A 1555 treaty between Charles V, Holy Roman Emperor, and the Schmalkaldic League that allowed the princes of the Holy Roman Empire to choose either Catholicism or Lutheranism as their territory's official religion.

German Calvinists

A religious group in Germany that follows the theological teachings and reforms of John Calvin, emphasizing the sovereignty of God and the scripture's authority over church traditions.

Treaty of Westphalia

A series of peace treaties signed in 1648 that ended the Thirty Years' War in Europe, significantly shaping the modern state system by acknowledging the principle of sovereignty.