Jaynes Inc

question 47

Essay

Jaynes Inc. acquired all of Aaron Co.'s common stock on January 1, 2010, by issuing 11,000 shares of $1 par value common stock. Jaynes' shares had a $17 per share fair value. On that date, Aaron reported a net book value of $120,000. However, its equipment (with a five-year remaining life) was undervalued by $6,000 in the company's accounting records. Any excess of consideration transferred over fair value of assets and liabilities is assigned to an unrecorded patent to be amortized over ten years. What was consolidated equipment as of December 31, 2011?

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Definitions:

Expected Price Level

The anticipated average cost of goods and services in the future, based on current trends, policies, and economic conditions.

Actual Price Level

The current average level of prices for goods and services in an economy, reflecting inflation or deflation.

Corrective Actions

Steps taken to fix a problem or eliminate a cause of nonconformities in processes or products.

Expected Price Level

The anticipation or forecast of future prices overall, impacting saving and spending decisions of consumers and businesses.