Question

Chapel Hill Company had common stock of $350,000 and retained earnings of $490,000. Blue Town Inc. had common stock of $700,000 and retained earnings of $980,000. On January 1, 2011, Blue Town issued 34,000 shares of common stock with a $12 par value and a $35 fair value for all of Chapel Hill Company's outstanding common stock. This combination is accounted for as an acquisition. Immediately after the combination, what was the consolidated net assets

Answer 1

Answer: $2,870,000

Step-by-step explanation:

Based on the information given in the question, the consolidated net assets will be calculated as:

= ($34,000 × 35) + $700,000 + $980,000

= $1,190,000 + $700,000 + $980,000

= $2,870,000

Therefore, the the consolidated net assets is $2,870,000.