Beta 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,Beta 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 Beta in the amount of $20,000,which Beta included in its accounts receivable.
-Based on the preceding information,what amount of total assets did Beta report in its balance sheet immediately after the acquisition?
A)$500,000
B)$650,000
C)$750,000
D)$900,00

Question

Quizplus · Accepted Answer

Beta's total assets immediately after the acquisition are $650,000. This is calculated by adding the total assets of Beta and Standard Video ($500,000 + $400,000 = $900,000) and then subtracting the amount of the account payable that Beta owed to Standard Video ($20,000).

Beta Company Acquired 100 Percent of the Voting Common Shares