On January 1, 20X9, Heathcliff Corporation Acquired 80 Percent of Garfield

question 26

Multiple Choice

On January 1, 20X9, Heathcliff Corporation acquired 80 percent of Garfield Corporation's voting common stock. Garfield's buildings and equipment had a book value of $300,000 and a fair value of $350,000 at the time of acquisition.
-Based on the preceding information,what will be the amount at which Garfield's buildings and equipment will be reported in consolidated statements using the parent company approach?

• A) $350,000
• B) $340,000
• C) $280,000
• D) $300,000

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Definitions:

Actual Value

Actual value refers to the true, inherent, or market value of an asset, not influenced by external conditions such as market fluctuations or investor perceptions.

Time Value

A concept stating the value of money is affected by time, primarily due to the potential earning capacity of money over time.

Stock Volatility

This is a measure of the fluctuation in the price of a stock over time, indicating the security's stability or instability.

Time To Expiration

The period remaining until the expiration date of a financial instrument, such as an option or futures contract.