REFERENCE: Ref.02_04 on January 1,20X1,the Moody Company Entered into a Transaction for Transaction

question 41

Multiple Choice

REFERENCE: Ref.02_04
On January 1,20X1,the Moody company entered into a transaction for 100% of the outstanding common stock of Osorio Company.To acquire these shares,Moody issued $400 in long-term liabilities and 40 shares of common stock having a par value of $1 per share but a fair value of $10 per share.Moody paid $20 to lawyers,accountants,and brokers for assistance in bringing about this purchase.Another $15 was paid in connection with stock issuance costs.Prior to these transactions,the balance sheets for the two companies were as follows: Note: Parentheses indicate a credit balance.
In Moody's appraisal of Osorio,three assets were deemed to be undervalued on the subsidiary's books: Inventory by $10,Land by $40,and Buildings by $60.
-If the transaction is accounted for as an acquisition,what amount was recorded as the investment in Osorio?

• A)$930.
• B)$820.
• C)$800.
• D)$835.
• E)$815.

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Definitions:

Thrown-Ness

A concept in existentialism describing the seemingly arbitrary conditions into which people are born and the necessity of making meaning within them.

Bad Faith

A concept in existentialist philosophy where an individual deceives themselves to avoid facing unpleasant truths or accepting responsibility.

Authentic Existence

Living in a manner that is true to one's self, values, and beliefs, rather than conforming to external pressures or societal expectations.

Bad Faith

Refers to the philosophical concept in existentialism emphasizing self-deception and the denial of one's freedom and responsibility.