Solved: Rails company paid 2500000 for the net assets of hawk, Accounting Basics

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Rails company paid 2500000 for the net assets of hawk

Question - Rails Company paid $2,500,000 for the net assets of Hawk Corporation and Hawk was then dissolved. Hawk had no liabilities. The fair values of Hawk's assets were $3,750,000. Hawk's only non-current assets were land and buildings with book values of $100,000 and $520,000, respectively, and fair values of $180,000 and $730,000, respectively. At what value will the buildings be recorded by Rails Company?

A. $730,000

B. $520,000

C. $210,000

D. $0

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Accounting Basics: Rails company paid 2500000 for the net assets of hawk

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