Following Are Selected Accounts for Green Corporation and Vega Company

question 32

Multiple Choice

Following are selected accounts for Green Corporation and Vega Company as of December 31, 2013. Several of Green's accounts have been omitted.

Green acquired 100% of Vega on January 1, 2009, by issuing 10,500 shares of its $10 par value common stock with a fair value of $95 per share. On January 1, 2009, Vega's land was undervalued by $40,000, its buildings were overvalued by $30,000, and equipment was undervalued by $80,000. The buildings have a 20-year life and the equipment has a 10-year life. $50,000 was attributed to an unrecorded trademark with a 16-year remaining life. There was no goodwill associated with this investment.
Compute the book value of Vega at January 1, 2009.

• A) $997,500.
• B) $857,500.
• C) $1,200,000.
• D) $1,600,000.
• E) $827,500.

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Definitions:

Standard Deviation

An indicator used to determine the extent of variation or dissimilarity within a group of values.

Data

Material compiled for consulting or investigative purposes.

Sum of Squared Scores

A calculation in statistics that measures the dispersion of a set of values by squaring each distance from the mean and summing them up, often used in variance and standard deviation calculations.

Data

Collected factual material, usually numeric, that serves as a basis for reasoning, discussion, or calculation.