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