Preston Company acquired the assets (except for cash) and assumed the liabilities of Saville Company. Immediately...
Preston Company acquired the assets (except for cash) and assumed the liabilities of Saville Company. Immediately prior to the acquisition, Saville Company's balance sheet was as follows:
| Book Value | Fair Value | |
| Cash | $ 120,000 | $ 120,000 |
| Receivables (net) | 192,000 | 228,000 |
| Inventory | 360,000 | 396,000 |
| Plant and equipment (net) | 480,000 | 540,000 |
| Land | 420,000 | 660,000 |
| Total assets | $ 1,572,000 | $ 1,944,000 |
| Liabilities | $ 540,000 | $ 594,000 |
| Common stock ($ 5 par value) | 480,000 | |
| Other contributed capital | 132,000 | |
| Retained earnings | 420,000 | |
| Total equities | $ 1,572,000 |
Required:
- Prepare the journal entries on the books of Preston Company to record the purchase of the assets and assumption of the liabilities of Saville Company if the amount paid was $1,560,000 in cash.
- Repeat the requirement in (A) assuming that the amount paid was $990,000.
Homework Answers
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Preston Company acquired the assets (except for cash) and
assumed the liabilities of Saville Company. Immediately...
EXERCISE 2‐1 Asset Purchase LO 6 Preston Company acquired the assets (except for cash) and assumed...
EXERCISE 2‐1 Asset Purchase LO 6 Preston Company acquired the assets (except for cash) and assumed the liabilities of Saville Company. Immediately prior to the acquisition, Saville Company's balance sheet was as follows: Book Value Fair Value Cash $ 120,000 $ 120,000 Receivables (net) 192,000 228,000 Inventory 360,000 396,000 Plant and equipment (net) 480,000 540,000 Land 420,000 660,000 Total assets $ 1,572,000 $ 1,944,000 Liabilities $ 540,000 $ 594,000 Common stock ($ 5 par value) 480,000 Other contributed capital 132,000...
EXERCISE 2‐1 Asset Purchase LO 6 Preston Company acquired the assets (except for cash) and assumed...
EXERCISE 2‐1 Asset Purchase LO 6 Preston Company acquired the assets (except for cash) and assumed the liabilities of Saville Company. Immediately prior to the acquisition, Saville Company's balance sheet was as follows: Book Value Fair Value Cash $ 120,000 $ 120,000 Receivables (net) 192,000 228,000 Inventory 360,000 396,000 Plant and equipment (net) 480,000 540,000 Land 420,000 660,000 Total assets $ 1,572,000 $ 1,944,000 Liabilities $ 540,000 $ 594,000 Common stock ($ 5 par value) 480,000 Other contributed capital 132,000...
please explain CISE 2-1 Asset Purchase LO 6 Book Value Fair Value Cash Receivables (net) Inventory...
please explain
CISE 2-1 Asset Purchase LO 6 Book Value Fair Value Cash Receivables (net) Inventory Plant and equipment (net) Land $ 120,000 192,000 360,000 480,000 420,000 $ 120,000 228,000 396,000 540,000 660,000 Total assets $1,572,000 $1,944,000 $ 594,000 Liabilities Common stock ($5 par value) Other contributed capital Retained earnings Total equities $ 540,000 480,000 132,000 420,000 $1,572,000 Required: A. Prepare the journal entries on the books of Preston Company to record the purchase of the assets and assumption of...
Exercise 2-1 Preston Company acquired the assets (except for cash) and assumed the liabilities of Saville...
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Arizona Corp. acquired the business Data Systems for $320,000
cash and assumed all liabilities at the date of purchase. Data’s
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and stockholders’ equity of $321,000. An appraiser assessed the
fair market value of the tangible assets at $310,000 at the date of
acquisition. Arizona Corp.’s financial condition just prior to the
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Assets
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Liab.
+
Equity
Rev.
–
Exp.
=
Net Inc.
Cash...
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1 19% 15:38 (50 points) For a $10.5 million cash and stock payment, Preston Company acquired a 55% controlling equity interest in the common voting stock of Scalibrini, Inc. The acquisition was completed on 1/1/20x0. At the time of the acquisition, the book value of Scalibrini's net assets was $16,970,000 Preston acquired Scalibrini with a cash payment of $3 million and by issuing 500,000 shares of their own $1 par value common stock, which at the acquisition date had a...
1 19% 15:38 (50 points) For a $10.5 million cash and stock payment, Preston Company acquired...
1 19% 15:38 (50 points) For a $10.5 million cash and stock payment, Preston Company acquired a 55% controlling equity interest in the common voting stock of Scalibrini, Inc. The acquisition was completed on 1/1/20x0. At the time of the acquisition, the book value of Scalibrini's net assets was $16,970,000 Preston acquired Scalibrini with a cash payment of $3 million and by issuing 500,000 shares of their own $1 par value common stock, which at the acquisition date had a...
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please explain
CISE 2-1 Asset Purchase LO 6 Book Value Fair Value Cash Receivables (net) Inventory Plant and equipment (net) Land $ 120,000 192,000 360,000 480,000 420,000 $ 120,000 228,000 396,000 540,000 660,000 Total assets $1,572,000 $1,944,000 $ 594,000 Liabilities Common stock ($5 par value) Other contributed capital Retained earnings Total equities $ 540,000 480,000 132,000 420,000 $1,572,000 Required: A. Prepare the journal entries on the books of Preston Company to record the purchase of the assets and assumption of...
Pepper Company acquired the assets (with the exception of cash) and assumed the liabilities of Salt Company on January 2, 2020. As compensation, Pepper gave 30,000 shares of its common stock, 15,000 shares of its Preferred Stock, and cash of $50,000 to the Salt stockholders. On the acquisition date, Pepper Company stock had the following characteristics. STOCK Common $10 $25 Preferred $100 $100 Immediately prior to the acquisition, Salt Corporation's balance sheet reflected the following book and fair values. Salt...
Arizona Corp. acquired the business Data Systems for $320,000
cash and assumed all liabilities at the date of purchase. Data’s
books showed tangible assets of $340,000, liabilities of $19,000,
and stockholders’ equity of $321,000. An appraiser assessed the
fair market value of the tangible assets at $310,000 at the date of
acquisition. Arizona Corp.’s financial condition just prior to the
acquisition is shown in the following statements model:
Assets
=
Liab.
+
Equity
Rev.
–
Exp.
=
Net Inc.
Cash...
Pharma Company acquired the assets (with the exception of cash) and assumed the liabilities of Astra Company on January 2, 2020 paying $720,000 cash. Astra Company's December 31, 2019 balance sheet reflecting both book and fair values is shown below: Book Value Fair Value $65,000 99,000 162,000 450,000 288,000 $1,064,000 Accounts Receivable, net Inventory Land Buildings, net Equipment,net Total Accounts Payable Note Payable Common Stock $2 par value Other Contributed Capital Retained Earnings Total $72,000 86,000 110,000 369,000 237,000 $874,000...
1 19% 15:38 (50 points) For a $10.5 million cash and stock payment, Preston Company acquired a 55% controlling equity interest in the common voting stock of Scalibrini, Inc. The acquisition was completed on 1/1/20x0. At the time of the acquisition, the book value of Scalibrini's net assets was $16,970,000 Preston acquired Scalibrini with a cash payment of $3 million and by issuing 500,000 shares of their own $1 par value common stock, which at the acquisition date had a...
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