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# Green obtained 100% of Vega on January 1, 2006, by issuing 10,500 shares of its \$10 par value common stock with a fair value of \$95 per share.

Green obtained 100% of Vega on January 1, 2006, by issuing 10,500 shares of its \$10 par value common stock with a fair value of \$95 per share. On January 1, 2006, Vega's 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.

5. Compute the book value of Vega at January 1, 2006.

A. \$997,500
B. \$857,500
C. \$1,200,000
D. \$1,600,000
E. \$827,500

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