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Exercise 2-5 Pritano Company acquired all the net assets of Succo Company on December 31, 2013,...
Pritano Company acquired all the net assets of Succo Company on December 31, 2018, for $2,160,000 cash. The balance sheet of Succo Company immediately prior to the acquisition showed: Book value Fair value Current assets $ 960,000 $ 960,000 Plant and equipment 1,080,000 1,440,000 Total $2,040,000 $2,400,000 Liabilities $ 180,000 $ 216,000 Common stock 480,000 Other contributed capital 600,000 Retained earnings 780,000 Total $2,040,000 As part of the negotiations, Pritano agreed to pay the stockholders of Succo $360,000 cash if...
Exercise 2‐5 Asset Purchase, Contingent Consideration as a Liability LO 7 Pritano Company acquired all the net assets of Succo Company on December 31, 2018, for $2,160,000 cash. The balance sheet of Succo Company immediately prior to the acquisition showed: Book value Fair value Current assets $ 960,000 $ 960,000 Plant and equipment 1,080,000 1,440,000 Total $2,040,000 $2,400,000 Liabilities $ 180,000 $ 216,000 Common stock 480,000 Other contributed capital 600,000 Retained earnings 780,000 Total $2,040,000 As part of the negotiations,...
Pritano Company acquired all the net assets of Succo Company on December 31, 2020 for $2,160,000 cash. The balance sheet of Succo immediately prior to the acquisition showed: Book Value Fair Value $960,000 1,440,000 $2,400,000 $216,000 Current Assets Plant and Equipment Total Liabilities Common Stock Other Contributed Capital Retained Earnings Total $960,000 1,080,000 $2,040,000 $180,000 480,000 600,000 780,000 $2,040,000 Pritano Company agreed to issue 10,000 additional shares of its $10 par value common stock to the stockholders of Succo if...
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...
Exercise 3-6 On December 31, 2013, Price Company purchased a controlling interest in Shipley Company. The balance sheet of Price Company and the consolidated balance sheet on December 3, 2013, were as follows: Price Company Consolidated Cash $23,140 $40,992 Accounts receivable 36,350 52,500 Inventory 123,490 151,399 Investment in Shipley Company 216,430 —0— Plant and equipment (net) 174,540 331,390 Land 110,290 223,723 Total $684,240 $800,004 Accounts payable $42,480 $120,050 Note payable 99,100 99,100 Noncontrolling interest in Shipley Company —0— 38,194 Common...
Exercise 3-6 On December 31, 2013, Price Company purchased a controlling interest in Shipley Company. The balance sheet of Price Company and the consolidated balance sheet on December 3, 2013, were as follows: Price Company Consolidated Cash $23,140 $40,992 Accounts receivable 36,350 52,500 Inventory 123,490 151,399 Investment in Shipley Company 216,430 —0— Plant and equipment (net) 174,540 331,390 Land 110,290 223,723 Total $684,240 $800,004 Accounts payable $42,480 $120,050 Note payable 99,100 99,100 Noncontrolling interest in Shipley Company —0— 38,194 Common...
Exercise 2-10 On January 1, 2013, Porsche Company acquired the net assets of Saab Company for $449,660 cash. The fair value of Saab’s identifiable net assets was $375,570 on this date. Porsche Company decided to measure goodwill impairment using the present value of future cash flows to estimate the fair value of the reporting unit (Saab). The information for these subsequent years is as follows: Year Present Value of Future Cash Flows Carrying Value of Saab’s Identifiable Net Assets* Fair...
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...
Exercise 2-8 Effective December 31, 2013, Zintel Corporation proposes to issue additional shares of its common stock in exchange for all the assets and liabilities of Smith Corporation and Platz Corporation, after which Smith and Platz will distribute the Zintel stock to their stockholders in complete liquidation and dissolution. Balance sheets of each of the corporations immediately prior to merger on December 31, 2013, follow. The common stock exchange ratio was negotiated to be 1:1 for both Smith and Platz....
Exercise 2-1 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 $109,980 $109,980 Receivables (net) 190,180 209,800 Inventory 340,720 363,860 Plant and equipment (net) 492,240 577,650 Land 415,110 671,300 Total assets $1,548,230 $1,932,590 Current Liabilities $585,370 $538,200 Common stock ($5 par value) 449,960 Other contributed capital 128,990 Retained earnings 383,910 Total equities $1,548,230 (a) Prepare the journal...