Following Are Selected Accounts for Green Corporation and Vega Company

question 13

Multiple Choice

Following are selected accounts for Green Corporation and Vega Company as of December 31, 2015. Several of Green's accounts have been omitted. Green acquired 100% of Vega on January 1, 2011, by issuing 10,500 shares of its $10 par value common stock with a fair value of $95 per share. On January 1, 2011, 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 December 31, 2015, consolidated revenues.

• A) $1,400,000.
• B) $800,000.
• C) $500,000.
• D) $1,590,375.
• E) $1,390,375.

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Definitions:

Wind Farms

Areas equipped with large numbers of wind turbines used to generate electricity.

Fossil Fuels

Natural fuels such as coal, oil, and natural gas derived from the remains of living organisms that have been buried for millions of years.

Migratory Birds

Birds that travel from one region or climate to another at regular times of the year, often for breeding or climate conditions.

Fallacy of Composition

The error of assuming that what is true of a member of a group is true for the group as a whole.