Princeton Company acquired 75 percent of the common stock of Sheffield Corporation on December 31,20X9.On the date of acquisition,Princeton held land with a book value of $150,000 and a fair value of $300,000;Sheffield held land with a book value of $500,000 and fair value of $500,000.At what amount would land be reported in a consolidated balance sheet prepared immediately after the combination?
A)$650,000
B)$500,000
C)$550,000
D)$375,000

Question

Quizplus · Accepted Answer

The consolidated balance sheet would report land at $650,000. This is calculated by adding the fair value of Princeton's land ($300,000) to the book value of Sheffield's land ($500,000) since Sheffield's land's book value equals its fair value.

Princeton Company Acquired 75 Percent of the Common Stock of Sheffield