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    Bailey, Inc. problem

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    Chapter 4 Problem 1

    Bailey, Inc., buys 60 percent of the outstanding stock of Luebs, Inc., in a purchase that resulted in the recognition of goodwill. Luebs owns a piece of land that cost $200,000 but was worth $500,000 at the date of purchase. For each of the three concepts described in this chapter, what value would be attributed to this land in a consolidated balance sheet at the date of takeover?

    Economic Proportionate Parent Company
    Unit Concept Consolidation Concept
    a. $500,000 $300,000 $500,000
    b. $200,000 $120,000 $500,000
    c. $200,000 $120,000 $380,000
    d. $500,000 $300,000 $380,000

    Please show calculation.

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    Bailey, Inc., buys 60 percent of the outstanding stock of Luebs, Inc., in a purchase that resulted in the recognition of goodwill. Luebs owns a piece of land that cost $200,000 but was worth $500,000 at the date of purchase. For each of the three concepts described in this chapter, what value would be attributed to this land in a consolidated balance sheet at the date of takeover?

    Economic Proportionate Parent Company
    Unit Concept Consolidation Concept
    a. $500,000 300,000 $500,000
    b. $200,000 $120,000 $500,000
    c. $200,000 ...

    Solution Summary

    This solution is comprised of a detailed explanation to answer the request of the assignment of more than 300 words of text.

    $2.19

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