On January 1,20X9,Wilton Company Acquired All of Sirius Company's Common

question 10

Multiple Choice

On January 1,20X9,Wilton Company acquired all of Sirius Company's common shares,for $365,000 cash.On that date,Sirius's balance sheet appeared as follows:
The fair values of all of Sirius's assets and liabilities were equal to their book values except for inventory that had a fair value of $85,000,land that had a fair value of $60,000,and buildings and equipment that had a fair value of $250,000.Buildings and equipment have a remaining useful life of 10 years with zero salvage value.Wilton Company decided to employ push-down accounting for the acquisition.Subsequent to the combination,Sirius continued to operate as a separate company.

-Based on the preceding information,what amount will be present in the revaluation capital account,when eliminating entries are prepared?

• A)$0
• B)$65,000
• C)$60,000
• D)$15,000

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Definitions:

Amortization

Amortization is the process of spreading the cost of an intangible asset over its useful life, similar to depreciation but for non-physical assets.

Gain

The financial benefit that occurs when the selling price of an asset exceeds its purchase price or carrying value.

Loss

A financial condition where expenses exceed revenues, indicating negative financial performance.