CD Inc. acquires 100% of the outstanding shares of Record Corp. for $1,200,000 and accounts...
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CD Inc. acquires 100% of the outstanding shares of Record Corp. for $1,200,000 and accounts for the transaction using the purchase method. Record Corps balance sheet at the date of acquisition appears below:
| Record, Corp. Balance Sheet Acquisition Date
Assets Cash |
Historical Cost
|
Current Market Value |
| $ 479,000 | $479,000 | |
| Accounts Receivable | 225,400 | 210,000 |
| Inventory | 98,900 | 105,000 |
| Depreciable Assets less Accumulated Depreciation | 554,700 | 600,000 |
| Note Receivable Goodwill | 100,000
| 100,000 |
| Total Assets
| $1,458,000 |
|
| Liabilities and Equities Accounts Payable | $ 458,000 | $458,000 |
| Note Payable | 325,000 | 325,000 |
| Deferred Income Tax Liability | 125,000 | 125,000 |
| Shareholders' Equity | 550,000 |
|
| Total Liabilities and Equities | $1,458,000 Based on the information concerning Record Corp. what is the market value of the company's shareholders' equity at the acquisition date? (Points : 2) $0 $908,000 $1,200,000 $1,458,000 |
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