Prime Company Acquired 100 Percent of the Voting Common Shares

question 9

Multiple Choice

Prime Company acquired 100 percent of the voting common shares of Standard Video Corporation,its bitter rival,by issuing bonds with a par value and fair value of $150,000.Immediately prior to the acquisition,Prime reported total assets of $500,000,liabilities of $280,000,and stockholders' equity of $220,000.At that date,Standard Video reported total assets of $400,000,liabilities of $250,000,and stockholders' equity of $150,000.Included in Standard's liabilities was an account payable to Prime in the amount of $20,000,which Prime included in its accounts receivable.
-Based on the preceding information,what amount of stockholders' equity was reported in the consolidated balance sheet immediately after acquisition?

• A)$220,000
• B)$150,000
• C)$370,000
• D)$350,000

Understand the classifications of investments (trading, available-for-sale, held-to-maturity).

Learn about adjustments and reporting for investments in financial statements.

Distinguish between different methods of reporting investments based on the level of influence/control.

Understand the classification of investment securities (debt vs. equity) and related investment terms.

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Definitions:

Arithmetically

In a manner related to arithmetic; involving the basic operations of mathematics, such as addition, subtraction, multiplication, and division.

Food Supplies

The availability and accessibility of food to a population, affecting nutritional status and health outcomes.

Preventive Measures

Actions taken to reduce the potential of future harm or adverse effects.

Population Growth

The increase in the number of individuals in a population, often measured in terms of birth rates, death rates, immigration, and emigration.