On January 1, 2010, Palk Corp

question 16

Multiple Choice

On January 1, 2010, Palk Corp. and Spraz Corp. had condensed balance sheets as follows:
On January 2, 2010, Palk borrowed the entire $84,000 it needed to acquire 80% of the outstanding common shares of Spraz. The loan was to be paid in ten equal annual principal payments, plus interest, beginning December 31, 2010. The excess consideration transferred over the underlying book value of the acquired net assets was allocated 60% to inventory and 40% to goodwill.

What is consolidated noncurrent assets at January 2, 2010?

• A) $195,000.
• B) $192,200.
• C) $186,600.
• D) $181,000.
• E) $169,800.

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Definitions:

PPE

Personal Protective Equipment; gear worn to minimize exposure to hazards that can cause serious workplace injuries and illnesses.

Electric Arc Welding

A type of welding process using an electrical arc to generate heat to melt and join metals together.

Eye Protection Filter

A protective device or coating that shields the eyes from harmful light or debris.

Oxyacetylene Cutting

A process that uses a mixture of oxygen and acetylene gases to cut through metal by burning or oxidizing.