Pickup Company Acquired 100 Percent of the Voting Common Shares

question 49

Multiple Choice

Pickup Company acquired 100 percent of the voting common shares of Sedan Corporation by issuing bonds with a par value and fair value of $200,000.Immediately prior to the acquisition,Pickup reported total assets of $600,000,liabilities of $370,000,and stockholders' equity of $230,000.At that date,Sedan reported total assets of $500,000,liabilities of $300,000,and stockholders' equity of $200,000.Included in Sedan's liabilities was an account payable to Pickup in the amount of $50,000,which Pickup included in its accounts receivable.
-Based on the preceding information,what amount of total liabilities was reported in the consolidated balance sheet immediately after the acquisition?

• A)$370,000
• B)$670,000
• C)$820,000
• D)$870,000

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Definitions:

Complete Obstruction

A full blockage that prevents passage or flow through an organ or pathway in the body.

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Upper Respiratory Tract Infection

An infectious condition affecting the nose, throat, and airways, common examples include the common cold and influenza.

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