Prime Company Acquired 100 Percent of the Voting Common Shares

question 9

Multiple Choice

Prime Company acquired 100 percent of the voting common shares of Standard Video Corporation,its bitter rival,by issuing bonds with a par value and fair value of $150,000.Immediately prior to the acquisition,Prime reported total assets of $500,000,liabilities of $280,000,and stockholders' equity of $220,000.At that date,Standard Video reported total assets of $400,000,liabilities of $250,000,and stockholders' equity of $150,000.Included in Standard's liabilities was an account payable to Prime in the amount of $20,000,which Prime included in its accounts receivable.
-Based on the preceding information,what amount of stockholders' equity was reported in the consolidated balance sheet immediately after acquisition?

• A)$220,000
• B)$150,000
• C)$370,000
• D)$350,000

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Definitions:

Human Capital

The sum of talent, expertise, or hidden assets belonging to individuals that can lead to economic profit for the people themselves, their employers, or their surrounding community.

Productivity

The measure of how efficiently production inputs, such as labor and capital, are being used in an economy to produce a given level of output.

Compensating Differential

Additional pay or benefits provided to employees to offset unpleasant aspects of a job.

Human Capital

Expertise, knowledge, and learned experiences of an individual or demographic, evaluated based on their monetary significance or cost to an entity or nation.