Question

10) Tanner Company, a subsidiary acquired for cash, owned equipment with a fair value higher than the book value as of the date of combination. A consolidated balance sheet prepared immediately after the acquisition would include this difference in:A) goodwill.B) retained earnings.C) deferred charges.D) equipment.

Answer 1

Out of all the options given, the correct option is

option D). Equipment

Step-by-step explanation:

Fair values find its use in the consolidated or integrated financial statement.

Fair values can be defined as the cash flows at discounted value.

In the given case, cash is not having any fair value, so the difference will be included in the equipment only