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

question 41

Multiple Choice

On January 1,20X9,Paradox 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.Paradox 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 of differential will arise in the consolidation process?

• A)$0
• B)$5,000
• C)$15,000
• D)$65,000

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Definitions:

Cooing

The early vocalization of infants, consisting of soft, murmuring sounds, particularly when content or as an early form of communication.

Holophrase

A single word that is used to express a complete, meaningful thought.

Whole Thought

A complete or comprehensive thought that encapsulates a fully formed idea or concept.

Object Permanence

The understanding that objects continue to exist even when they cannot be observed (seen, heard, touched, smelled, or sensed in any way).