Perth Corporation acquired a 100% interest in Sansone Company for $1,600,000 when Sansone had no liabilities.The book values and fair values of Sansone's assets were Immediately following the acquisition, equipment will be included on the consolidated balance sheet at

Question

Perth Corporation acquired a 100% interest in Sansone Company for $1,600,000 when Sansone had no liabilities.The book values and fair values of Sansone's assets were  Immediately following the acquisition, equipment will be included on the consolidated balance sheet at

Quizplus · Accepted Answer

The equipment has a book value of $150,000 but a fair value of $210,000. In a business combination, the acquirer must recognize the fair values of the acquired assets and liabilities on the consolidated balance sheet. Therefore, the equipment should be included on the consolidated balance sheet at its fair value of $210,000.

Perth Corporation Acquired a 100% Interest in Sansone Company for $1,600,000