$130,000 $135,000 $90,000 $45,000 On January 1, 20X9, Gulliver Corporation acqui

Question

       $130,000
       $135,000
       $90,000
       $45,000

On January 1, 20X9, Gulliver Corporation acquired 80 percent of Sea-Gull Company's common stock for $160,000 cash. The fair value of the noncontrolling interest at that date was determined to be $40,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:

At the date of the business combination, the book values of Sea-Gull's net assets and liabilities approximated fair value except for inventory, which had a fair value of $45,000, and land, which had a fair value of $60,000. What amount of total inventory will be reported in the consolidated balance sheet prepared immediately after the business combination? (Points : 1)

Explanation / Answer

Book value of inventory of acquiring company before combination = $90,000

Fair value of acquired inventory = $45,000

Amount of total inventory immediately after business combination = $90,000 + $45,000 = $135,000

Hence, answer is $135,000

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