Hanson Co Acquired All of the Common Stock of Roberts Inc

question 86

Essay

Hanson Co. acquired all of the common stock of Roberts Inc. on January 1, 2010, transferring consideration in an amount slightly more than the fair value of Roberts' net assets. At that time, Roberts had buildings with a twenty-year useful life, a book value of $600,000, and a fair value of $696,000. On December 31, 2011, Roberts had buildings with a book value of $570,000 and a fair value of $648,000. On that date, Hanson had buildings with a book value of $1,878,000 and a fair value of $2,160,000.
Required:
What amount should be shown for buildings on the consolidated balance sheet dated December 31, 2011?

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Definitions:

Intangible Assets

Assets that cannot be physically touched or held, such as patents, trademarks, and goodwill.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against an asset since it was placed in service, reflecting its loss of value over time.

Property Plant

Property, Plant, and Equipment (PP&E) are fixed assets including buildings, machinery, and equipment that are owned and used by a company for operations and not for immediate sale.

Corporate Office

The central or main office of a company where key administrative and executive activities occur.