Company A acquired a 50% stake in Company T on January 1, 2003 by paying T’s shareholders $100,000 in cash. Pre-acquisition balance sheets for the two firms are presented below:
| Balance Sheet |
|
Company A |
Company T |
| Current assets |
$400,000 |
$60,000 |
| Fixed assets |
600,000 |
100,000 |
| Total |
$1,000,000 |
$160,000 |
|
|
|
| Current liabilities |
$50,000 |
$ 30,000 |
| Common stock |
350,000 |
60,000 |
| Retained earnings |
600,000 |
70,000 |
| Total |
$1,000,000 |
$160,000 |
What are the post-acquisition balance sheet values for total assets for Company A under the equity and acquisition methods of accounting respectively?
A. $1,060,000 and $1,000,000.
B. $1,060,000 and $1,060,000.
C. $1,000,000 and $1,060,000.
|
