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Vader Company purchased 100 percent of the common shares of Skywalker Company by issuing shares of common stock valued at $900,000. Selected accounts from Vader's balance sheet at the date of combination are as follows:Inventory - $700,000 Building and Equipment (net) - 1,400,000 Common Stock - 840,000 Retained Earnings - 2,000,000 Selected accounts from the balance sheet of Skywalker at acquisition are as follows: Inventory - $200,000 Building and Equipment (net) - 900,000 Common Stock - 450,000 Additional Paid-In Capital - 450,000 Retained Earnings - (60,000) On the date of purchase, Skywalker's inventory and buildings and equipment had fair values of $255,000 and $870,000, respectively. Based on the information given above, the amount to be reported for inventory in the consolidated balance sheet immediately after the combination is: 1. $1,000,000 2. $955,000 3. $900,000 4. $700,000 5. None of the above

User Leogps
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1 Answer

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Answer:

2. $955,000

Step-by-step explanation:

The computation of the amount to be reported for inventory in the consolidated balance sheet is shown below:

= Vader inventory value in the balance sheet + Sky-walker inventory value in the balance sheet

= $700,000 + $255,000

= $955,000

Since we have to report the inventory based on the consolidated balance sheet so we added both inventory value that would be presented on each balance sheet

User Toshiba
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