Purchase at More than Book ValueRamrod Manufacturing acquired all the assets and liabiliti...

Purchase at More than Book Value

Ramrod Manufacturing acquired all the assets and liabilities of Stafford Industries on January 1, 20X2, in exchange for 4,000 shares of Ramrod’s $20 par value common stock. Balance sheet data for both companies just before the merger are given as follows:

Ramrod shares were selling for $150 on the date of acquisition.

Required

Prepare the following:

a. Journal entries to record the acquisition on Ramrod’s books.

b. A balance sheet for the combined enterprise immediately following the business combination.