On January 1, 20X1, the Moody Company Entered into a Transaction

question 43

Multiple Choice

On January 1, 20X1, the Moody Company entered into a transaction for 100% of the outstanding common stock of Osorio Company. To acquire these shares, Moody issued $400 in long-term liabilities and 40 shares of common stock having a par value of $1 per share but a fair value of $10 per share. Moody paid $20 to lawyers, accountants, and brokers for assistance in bringing about this acquisition. Another $15 was paid in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows: Note: Parentheses indicate a credit balance. In Moody's appraisal of Osorio, three assets were deemed to be undervalued on the subsidiary's books: Inventory by $10, Land by $40, and Buildings by $60.
Compute the amount of consolidated cash after recording the acquisition transaction.

• A) $220.
• B) $185.
• C) $200.
• D) $205.
• E) $215.

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Definitions:

Implicit Memory

Refers to the type of memory that enables individuals to perform tasks without conscious awareness of these previous experiences.

Working Memory

A cognitive construct with a maximum capacity designed for the quick storage of information pending processing.

Short-Term Memory

A cognitive function responsible for temporarily storing and managing information required for complex cognitive tasks such as learning, reasoning, and comprehension.

Explicit Memory

The type of long-term memory involving conscious recall of factual data, previous experiences, and concepts.