Homework Answers
| 1) | |||
| a) | |||
| Date | Account Titles & Explanation | Debit | Credit |
| Cash | $ 50,000.00 | ||
| Other Current Assets | $ 1,50,000.00 | ||
| Property, plant and equipment | $ 4,00,000.00 | ||
| Identifiable intangibles | $ 2,00,000.00 | ||
| Goodwill | $ 3,50,000.00 | ||
| Current Liabilities | $ 1,00,000.00 | ||
| Long-term liabilities | $ 2,50,000.00 | ||
| Cash | $ 8,00,000.00 | ||
| b) | Investment in Benson | $ 8,00,000.00 | |
| Cash | $ 8,00,000.00 | ||
| 2) | |||
| Allen Corp | |||
| Post-combination Balance Sheet | |||
| ASSETS | Alternative 1 | Alternative 2 | |
| Cash | $ 2,50,000.00 | $ 2,00,000.00 | |
| Other Current Assets | $ 7,50,000.00 | $ 6,00,000.00 | |
| Property, plant and equipment | $ 16,00,000.00 | $ 12,00,000.00 | |
| Identifiable intangibles | $ 2,00,000.00 | ||
| Goodwill | $ 3,50,000.00 | ||
| Investment in Benson | $ 8,00,000.00 | ||
| Total Assets | $ 31,50,000.00 | $ 28,00,000.00 | |
| LIABILITIES AND SHAREHOLDER EQUITY | |||
| Current Liabilities | $ 4,00,000.00 | $ 3,00,000.00 | |
| Long-term liabilities | $ 8,50,000.00 | $ 6,00,000.00 | |
| Common Stock | $ 2,00,000.00 | $ 2,00,000.00 | |
| Additional paid-in capital | $ 9,00,000.00 | $ 9,00,000.00 | |
| Retained Earnings | $ 8,00,000.00 | $ 8,00,000.00 | |
| Total Liabilities and Shatrholder equity | $ 31,50,000.00 | $ 28,00,000.00 |
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