Note: The CEO has not decided whether they will purchase Bloomington Re-Bar Company using the “Asset Acquisition Method” or the “Stock Acquisition Method.”
Bloomington Re-Bar Company
Book value Fair Value
Cash 450,000 450,00
Account Receivable 1,950,000 1,785,000
Inventory 3,650,000 3,250,000
Building(net) 2,500,000 2,600,000
Equipment 3,250,000 2,200,000
Land 110,000 1,500,000
Account payable 2,850,000 3,125,000
Mortgage Payable 1,100,000 1,100,000
Other identified during due diligence
Patent 0 6,000,000
Environmental Clean up liability 0 3,000,000
Required:
Note: Bloomington Re-Bar Company’s Stockholders’ Equity consists of the following:
Common Stock $ 25,000
APIC $2,975,000
Retained Earnings $4,960,000
Answer:
Minneapolis Manufacturing Inc.’s CEO has asked you to provide the relevant journal entries using the following...
Minneapolis Manufacturing Inc.’s CEO has asked you to provide the relevant journal entries using the following acquisition information. Note: The CEO has not decided whether they will purchase Bloomington Re-Bar Company using the “Asset Acquisition Method” or the “Stock Acquisition Method.” Bloomington Re-Bar Company Book value Fair Value Cash 450,000 450,00 Account Receivable 1,950,000 1,785,000 Inventory 3,650,000 3,250,000 Building(net) 2,500,000 2,600,000 Equipment 3,250,000 2,200,000 Land 110,000 1,500,000 Account payable 2,850,000 3,125,000 ...
Minneapolis Manufacturing Inc.’s CEO has asked you to provide the relevant journal entries using the following acquisition information. Note: The CEO has not decided whether they will purchase Bloomington Re-Bar Company using the “Asset Acquisition Method” or the “Stock Acquisition Method.” Bloomington Re-Bar Company Book value Fair Value Cash 450,000 450,00 Account Receivable 1,950,000 1,785,000 Inventory 3,650,000 3,250,000 Building(net) 2,500,000 2,600,000 Equipment 3,250,000 2,200,000 Land 110,000 1,500,000 Account payable 2,850,000 3,125,000 ...
C. Prepare the journal entry assuming Minneapolis Manufacturing Inc. decided to purchase 75% of Bloomington Re-Bar Company for $9,000,000 in a Stock Acquisition. D. For scenario C. (75% Stock Acquisition - above) prepare a CAD. In addition, prepare the necessary workpaper elimination entries necessary to complete a consolidated financial statement workpaper. Note: Bloomington Re-Bar Company’s Stockholders’ Equity consists of the following: Common Stock $ 25,000 APIC $2,975,000 Retained Earnings $4,960,000
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