Solution-What amount of solar building included on balance

What amount of solar building included on balance sheet

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Reference no: EM133184548

Question - Huey Company acquires 100% of the stock of Solar Corporation on January 1, 2019, for $2,400,000 cash. As of that date Solar had the following account balances:

	Book Value	Fair value
Cash	$630,000	$630,000
Accounts receivable	775,000	775,000
Inventory	350,000	400,000
Building-net (10 year life)	1,000,000	900,000
Equipment-net (5 year life)	300,000	400,000
Land	600,000	900,000
Accounts Payable	125,000	125,000
Bonds Payable (Face amount $1,000,000, due 12/31/2023)	2,000,000	2,050,000
Common stock	500,000
Additional paid-in capital	250,000
Retained earnings	780,000

In 2019 and 2020, Solar had net income of $250,000 and $240,000, respectively. In addition, Solar paid dividends of $16,000 in both years. Inventory is assumed to be sold in 2019. Assume straight line amortization/ depreciation for assets and bonds payable.

Required - What amount of Solar's building would be included on the consolidated balance sheet at December 31, 2019?

A. $890,000

B. $880,000

C. $810,000

D. $990,000

Reference no: EM133184548

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What amount of solar building included on balance sheet

Reference no: EM133184548

Reference no: EM133184548

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