On January 2,20X2,Piranha Company Acquired 70 Percent of Salmon Corporation's

question 31

Multiple Choice

On January 2,20X2,Piranha Company acquired 70 percent of Salmon Corporation's common stock for $420,000 cash.At the acquisition date,the book values and fair values of Salmon' assets and liabilities were equal,and the fair value of the noncontrolling interest was equal to 30 percent of the total book value of Salmon.The stockholders' equity accounts of the two companies at the acquisition date are as follows:
Noncontrolling interest was assigned income of $15,000 in Piranha's consolidated income statement for 20X2.
-Based on the preceding information,what is the total stockholders' equity in the consolidated balance sheet as of January 2,20X2?

• A)$1,120,000
• B)$1,300,000
• C)$1,480,000
• D)$1,900,000

---

Definitions:

Economic Profits

The contrast between aggregate sales and cumulative expenditures, including both disclosed and undeclared costs.

Long Run

A period during which all factors of production and costs can be varied, without any fixed factors or constraints.

Profit Per Unit

The difference between the selling price and the cost of one unit of a product, indicating how much profit is made from selling a single unit.

Restaurant Market

A sector of the economy comprised of businesses that prepare and serve food and beverages to customers.