On January 1, 2010, Palk Corp

question 37

Multiple Choice

On January 1, 2010, Palk Corp. and Spraz Corp. had condensed balance sheets as follows: On January 2, 2010, Palk borrowed the entire $84,000 it needed to acquire 80% of the outstanding common shares of Spraz. The loan was to be paid in ten equal annual principal payments, plus interest, beginning December 31, 2010. The excess consideration transferred over the underlying book value of the acquired net assets was allocated 60% to inventory and 40% to goodwill.
-What is consolidated stockholders' equity at January 2, 2010?

• A) $112,000.
• B) $133,000.
• C) $168,000.
• D) $182,000.
• E) $203,000.

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Definitions:

Aggregate Demand

is the total demand for all goods and services within a particular market or economy at a given price level and in a given time period.

Economic Fluctuations

Variations in the level of economic activity in a country over time, characterized by periods of boom and recession.

Future Optimism

A psychological state or economic theory that anticipates positive outcomes and growth in the future.

Rising Prices

Rising prices refer to the phenomenon where the general level of prices for goods and services in an economy increases over time, often indicative of inflationary pressures.