Varton Corp

question 123

Essay

Varton Corp. acquired all of the voting common stock of Caleb Co. on January 1, 2011. Varton owned some land with a book value of $84,000 that was sold to Caleb for its fair value of $120,000. How should this transaction be accounted for by the consolidated entity?

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Definitions:

Numbers

Numbers assign value and relativity to phenomena. As contrasted with numerals, they can be calculated.

Numerals

Numerals are labels such as street numbers that cannot be computed.

Accurate

A description of information, data, or measurements that are correct and free from errors or inaccuracies.

Test-Retest

To determine the reliability of a measure by testing and retesting it under the same conditions. If the measure is reliable, it will produce similar results each time.