On January 1, 2013, the Moody Company entered into a transaction for 100% of the outstanding common stock of Osorio Company. To acquire these shares, Moody issued $400 in long-term liabilities and also issued 40 shares of common stock having a par value of $1 per share but a fair value of $10 per share. Moody paid $20 to lawyers, accountants, and brokers for assistance in bringing about this acquisition. Another $15 was paid in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows: Moody OsorioCash$180  $40 Receivables 810   180 Inventories 1,080   280 Land 600   360 Buildings (net) 1,260   440 Equipment (net) 480   100 Accounts payable (450)  (80)Long-term

liabilities (1,290)  (400)Common stock ($1 par) (330)    Common stock ($20 par)     (240)Additional paid-in capital (1,080)  (340)Retained earnings (1,260)  (340)??Note: Parentheses indicate a credit balance.??In Moody's appraisal of Osorio, three assets were deemed to be undervalued on the subsidiary's books: Inventory by $10, Land by $40, and Buildings by $60.?Compute the amount of consolidated buildings (net) at date of acquisition.

A. $1,700.
B. $500.
C. $1,320.
D. $1,640.
E. $1,760.


Answer: E

Business

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