Question

Following are selected accounts for Gemini Corporation and Mars Company as of December 31, 2015. Several of Gemini's accounts have been omitted.

•                                                        Gemini                Mars
• Revenues                                       $900,000        $500,000
• Cost of Goods Sold                         360,000         200,000
• Depreciation expense                       140,000           40,000
• Other expenses                                100,000           60,000
• Equity in Mars' Income                        ?
• Retained Earnings, 1/1/15              1,350,000      1,200,000
• Dividends                                          195,000           80,000
• Current Assets                                   300,000      1,380,000
• Land                                                  450,000         180,000
• Building (Net)                                   750,000         280,000
• Equipment (Net)                                300,000         500,000
• Liabilities                                           600,000         620,000
• Common Stock                                 450,000           80,000
• Additional Paid-in Capital                    75,000        320,000
  
  Gemini acquired 100% of Mars on January 1, 2011, by issuing 10,500 shares of its $10 par value common stock with a fair value of $95 per share. On January 1, 2011, Mars' land was undervalued by $40,000, its buildings were overvalued by $30,000, and equipment was undervalued by $80,000. The buildings have a 20-year life and the equipment has a 10-year life. $50,000 was attributed to an unrecorded trademark with a 16-year remaining life. There was no goodwill associated with this investment. The book value of Mars at Jan 1, 2011 was 857,500.
  
  Compute the December 31, 2015, consolidated land.

Multiple Choice

• $180,000.

• $220,000.

• $630,000.

• $670,000.

• $450,000.

Answer 1

Consolidated land on December 31, 2015 = $450000 +(180000+40000)

= $670000