Condensed balance sheets for Phillips Company and Solina Company on January 1, 2013, are as follows:...
Condensed balance sheets for Phillips Company and Solina Company on January 1, 2013, are as follows:
Phillips Solina
Current assets$180,000$85,000
Plant and equipment (net)450,000140,000
Total assets$630,000$225,000
Total liabilities$95,000$35,000
Common stock, $10 par value350,000160,000
Other contributed capital125,00053,000
Retained earnings (deficit)60,000(23,000)
Total liabilities and equities$630,000$225,000
On January 1, 2013, the stockholders of Phillips and Solina agreed to a consolidation. Because FASBrequires that one party be recognized as the acquirer and the other as the acquiree, it was agreed that Phillips wasacquiring Solina. Phillips agreed to issue 20,000 shares of its $10 par stock to acquire all the net assets of Solinaat a time when the fair value of Phillips’ common stock was $15 per share.
On the date of consolidation, the fair values of Solina’s current assets and liabilities were equal to their bookvalues. The fair value of plant and equipment was, however, $150,000. Phillips will incur $20,000 of direct acqui-sition costs and $6,000 in stock issue costs.
Required:Prepare the journal entries on the books of Phillips to record the acquisition of Solina Company’s net assets.
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Condensed balance sheets for Phillips Company and Solina Company
on January 1, 2013, are as follows:...
2-1 Condensed balance sheets for Phillips Company and Solina Company on January 1, 2013, are as...
2-1
Condensed balance sheets for Phillips Company and Solina Company
on January 1, 2013, are as follows:
Phillips
Solina
Current assets
$171,610
$81,840
Plant and equipment
(net)
441,500
144,220
Total assets
$613,110
$226,060
Total liabilities
$98,070
$35,990
Common stock, $10 par
value
327,300
167,910
Other contributed
capital
116,550
50,110
Retained earnings
(deficit)
71,190
(27,950
)
Total liabilities and
equities
$613,110
$226,060
On January 1, 2013, the stockholders of Phillips and Solina agreed
to a consolidation. Because FASB requires that one...
Condensed balance sheets for Smith and Jones on January 1, 2019 are as follows: Current Assets...
Condensed balance sheets for Smith and Jones on January 1, 2019 are as follows: Current Assets Plant and Equipment, Net Total Assets Smith $180,000 450,000 $630,000 Jones $85,000 140,000 $225,000 Total Liabilities Common Stock, $10 par value Other Contributed Capital Retained Earnings (deficit) Total Liabilities and Equities $95,000 350,000 125,000 60,000 $630,000 $35,000 160,000 53,000 -23,000 $225,000 On January 1, 2019, Smith and Jones agreed to a consolidation. Because the FASB requires one party to be the buyer or acquiring...
Assume that on January 1, 2013, an investor company acquired 100% of the outstanding voting common...
Assume that on January 1, 2013, an investor company acquired 100% of the outstanding voting common stock of an investee company. The following financial statement information is for the investor company and the investee company on January 1, 2013, prepared immediately before this transaction. Book Values Investor Investee Receivables & inventaries $150,000 $75,000 Land 300,000 150,000 Property & equipment 337,500 150,000 Total assets $787,500 $375,000 Liabilities $225,000 $120,000 Common stock ($2 par) 30,000 15,000 Additional paid-in capital 420,000 225,000 Retained...
Exercise 2-2 The balance sheets of Petrello Company and Sanchez Company as of January 1, 2014,...
Exercise 2-2
The balance sheets of Petrello Company and Sanchez Company as of
January 1, 2014, are presented below. On that date, after an
extended period of negotiation, the two companies agreed to merge.
To effect the merger, Petrello Company is to exchange its unissued
common stock for all the outstanding shares of Sanchez Company in
the ratio of 1/2 share of Petrello for each share of Sanchez.
Market values of the shares were agreed on as Petrello, $50;
Sanchez,...
On January 1, 20X5, Zebb and Nottle Companies had condensed balance sheets as shown below: Current...
On January 1, 20X5, Zebb and Nottle Companies had condensed balance sheets as shown below: Current Assets Plant and Equipment Zebb Company $1,000,000 1,500,000 $2,500,000 Nottle Company $ 600,000 800,000 $1,400,000 Current Liabilities Long-Term Debt Common Stock, $10 par Paid-in Capital in Excess of Par Retained Earnings $ 200,000 300,000 1,400,000 $ 100,000 300,000 400,000 100,000 500.000 $1,400,000 0 600,000 $2.500.000 Required: Record the acquisition of Nottle's net assets, the issuance of the stock and/or payment of cash, and payment...
Assume that on January 1, 2013, an investor company acquired 100% of the outstanding voting common...
Assume that on January 1, 2013, an investor company acquired 100% of the outstanding voting common stock of an investee company. The following financial statement information is for the investor company and the investee company on January 1, 2013, prepared immediately before this transaction. Book Values Investor Investee Receivables & inventories $100,000 $50,000 Land 200,000 100.000 Property & equipment 225.000 100.000 Total assets $525,000 $250,000 Liabilities $150,000 $80,000 Common stock ($2 par) 20,000 10,000 Additional paid-in capital 280.000 150.000 Retained...
EXERCISE 2‐2 Acquisition Method LO 6 The balance sheets of Petrello Company and Sanchez Company as...
EXERCISE 2‐2 Acquisition Method LO 6 The balance sheets of Petrello Company and Sanchez Company as of January 1, 2019, are presented below. On that date, after an extended period of negotiation, the two companies agreed to merge. To effect the merger, Petrello Company is to exchange its unissued common stock for all the outstanding shares of Sanchez Company in the ratio of 1/212 share of Petrello for each share of Sanchez. Market values of the shares were agreed on...
67 EXERCISE 2-2 Acquisition Method LO 6 The balance sheets of Petrello Company and Sanchez Company...
67 EXERCISE 2-2 Acquisition Method LO 6 The balance sheets of Petrello Company and Sanchez Company as of January 1, 2019, are pre- sented below. On that date, after an extended period of negotiation, the two companies agreed to merge. To effect the merger, Petrello Company is to exchange its unissued common stock for all the outstanding shares of Sanchez Company in the ratio of y, share of Petrello for each share of San- chez. Market values of the shares...
Problem 2-5 Balance sheets for Salt Company and Pepper Company on December 31, 2013, follow: Salt Pepper A...
Problem 2-5 Balance sheets for Salt Company and Pepper Company on December 31, 2013, follow: Salt Pepper ASSETS Cash Receivables Inventories $97,130 118,880 138,730 711.180 $1,065,920 $183,620 248,880 241,372 1.121.360 $1,795,232 Plant assets $177,840 154,910 Total assets EQUITIES Accounts payable Mortgage payable Common stock, $20 par value Other contributed capital Retained earnings Total equities $245,513 190,000 870,400 253,410 235,909 $1,795,232 185,880 230,260 $1,065,920 Pepper Company tentatively plans to issue 27.540 shares of its $20 par value stock, which has a...
On January 1, Park Corporation and Strand Corporation had condensed balance sheets as follows: Park Strand...
On January 1, Park Corporation and Strand Corporation had condensed balance sheets as follows: Park Strand Current assets $ 116,000 $ 31,300 Noncurrent assets 107,500 49,200 Total assets $ 223,500 $ 80,500 Current liabilities $ 52,500 $ 30,500 Long-term debt 66,000 Stockholders' equity 105,000 50,000 Total liabilities and equities $ 223,500 $ 80,500 On January 2, Park borrowed $70,400 and used the proceeds to obtain 80 percent of the outstanding common shares of Strand. The acquisition price was considered proportionate...
2-1
Condensed balance sheets for Phillips Company and Solina Company
on January 1, 2013, are as follows:
Phillips
Solina
Current assets
$171,610
$81,840
Plant and equipment
(net)
441,500
144,220
Total assets
$613,110
$226,060
Total liabilities
$98,070
$35,990
Common stock, $10 par
value
327,300
167,910
Other contributed
capital
116,550
50,110
Retained earnings
(deficit)
71,190
(27,950
)
Total liabilities and
equities
$613,110
$226,060
On January 1, 2013, the stockholders of Phillips and Solina agreed
to a consolidation. Because FASB requires that one...
Condensed balance sheets for Smith and Jones on January 1, 2019 are as follows: Current Assets Plant and Equipment, Net Total Assets Smith $180,000 450,000 $630,000 Jones $85,000 140,000 $225,000 Total Liabilities Common Stock, $10 par value Other Contributed Capital Retained Earnings (deficit) Total Liabilities and Equities $95,000 350,000 125,000 60,000 $630,000 $35,000 160,000 53,000 -23,000 $225,000 On January 1, 2019, Smith and Jones agreed to a consolidation. Because the FASB requires one party to be the buyer or acquiring...
Assume that on January 1, 2013, an investor company acquired 100% of the outstanding voting common stock of an investee company. The following financial statement information is for the investor company and the investee company on January 1, 2013, prepared immediately before this transaction. Book Values Investor Investee Receivables & inventaries $150,000 $75,000 Land 300,000 150,000 Property & equipment 337,500 150,000 Total assets $787,500 $375,000 Liabilities $225,000 $120,000 Common stock ($2 par) 30,000 15,000 Additional paid-in capital 420,000 225,000 Retained...
Exercise 2-2
The balance sheets of Petrello Company and Sanchez Company as of
January 1, 2014, are presented below. On that date, after an
extended period of negotiation, the two companies agreed to merge.
To effect the merger, Petrello Company is to exchange its unissued
common stock for all the outstanding shares of Sanchez Company in
the ratio of 1/2 share of Petrello for each share of Sanchez.
Market values of the shares were agreed on as Petrello, $50;
Sanchez,...
On January 1, 20X5, Zebb and Nottle Companies had condensed balance sheets as shown below: Current Assets Plant and Equipment Zebb Company $1,000,000 1,500,000 $2,500,000 Nottle Company $ 600,000 800,000 $1,400,000 Current Liabilities Long-Term Debt Common Stock, $10 par Paid-in Capital in Excess of Par Retained Earnings $ 200,000 300,000 1,400,000 $ 100,000 300,000 400,000 100,000 500.000 $1,400,000 0 600,000 $2.500.000 Required: Record the acquisition of Nottle's net assets, the issuance of the stock and/or payment of cash, and payment...
Assume that on January 1, 2013, an investor company acquired 100% of the outstanding voting common stock of an investee company. The following financial statement information is for the investor company and the investee company on January 1, 2013, prepared immediately before this transaction. Book Values Investor Investee Receivables & inventories $100,000 $50,000 Land 200,000 100.000 Property & equipment 225.000 100.000 Total assets $525,000 $250,000 Liabilities $150,000 $80,000 Common stock ($2 par) 20,000 10,000 Additional paid-in capital 280.000 150.000 Retained...
67 EXERCISE 2-2 Acquisition Method LO 6 The balance sheets of Petrello Company and Sanchez Company as of January 1, 2019, are pre- sented below. On that date, after an extended period of negotiation, the two companies agreed to merge. To effect the merger, Petrello Company is to exchange its unissued common stock for all the outstanding shares of Sanchez Company in the ratio of y, share of Petrello for each share of San- chez. Market values of the shares...
Problem 2-5 Balance sheets for Salt Company and Pepper Company on December 31, 2013, follow: Salt Pepper ASSETS Cash Receivables Inventories $97,130 118,880 138,730 711.180 $1,065,920 $183,620 248,880 241,372 1.121.360 $1,795,232 Plant assets $177,840 154,910 Total assets EQUITIES Accounts payable Mortgage payable Common stock, $20 par value Other contributed capital Retained earnings Total equities $245,513 190,000 870,400 253,410 235,909 $1,795,232 185,880 230,260 $1,065,920 Pepper Company tentatively plans to issue 27.540 shares of its $20 par value stock, which has a...
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