Reference no: EM132782848

Pax Company acquired 80% of the outstanding voting stock of Sax Company on January 2, 20x1, for $190,000. Balance sheets for Pax and Sax Companies immediately after the stock acquisitions were as follows:

                                                    Pax Company                    Sax Company

Current assets                        $110,000                         $ 60,000

Investment in Sax Company       190,000                                   -0-

Property, plant, & equipment         350,000                            140,000

Patents and copyrights            25,000                                          70,000

Total assets                                $675,000                                $270,000

Current liabilities                           $ 68,000                                  $ 30,000

Bonds payable                                     -0-                                     20,000

Common stock                                 300,000                                  100,000

Other contributed capital                      140,000                               40,000

Retained earnings                               167,000                                 80,000

Total liab. & stockholders' equity             $675,000                            $270,000

problem 1: Sax Company owed Pax Company $8,000 on open account on the date of acquisition. On the consolidated balance sheet, what amount will appear for current assets?

a.$110,000

b.$170,000

c.$178,000

d.$162,000