Prime Company Acquired 100 Percent of the Voting Common Shares

question 52

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 total liabilities was reported in the consolidated balance sheet immediately after acquisition?

• A)$500,000
• B)$530,000
• C)$280,000
• D)$660,000

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