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 current accounting practice?
A) $350,000
B) $340,000
C) $280,000
D) $300,000

Question

Quizplus · Accepted Answer

In a business combination, assets are reported at their fair value on the acquisition date. Therefore, Garfield's buildings and equipment will be reported at the fair value of $350,000 in the consolidated statements.

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