Balances Reported Following Combination
Elm Corporation and Maple Company have announced terms of an exchange agreement under which Elm will issue 8,000 shares of its $10 par value common stock to acquire all of Maple Company’s assets. Elm shares currently are trading at $50, and Maple $5 par value shares are trading at $18 each. Historical cost and fair value balance sheet data on January 1, 20X2, are as follows:
Balance Sheet Item | Elm Corporation | Maple Company | ||
Book Value | Fair Value | Book Value | Fair Value | |
Cash and Receivables | $150,000 | $150,000 | $ 40,000 | $ 40,000 |
Land | 100,000 | 170,000 | 50,000 | 85,000 |
Buildings and Equipment (net) | 300,000 | 400,000 | 160,000 | 230,000 |
Total Assets | $550,000 | $720,000 | $250,000 | $355,000 |
Common Stock | $200,000 |
| $100,000 |
|
Additional Paid-In Capital | 20,000 |
| 10,000 |
|
Retained Earnings | 330,000 |
| 140,000 |
|
Total Equities | $550,000 |
| $250,000 |
|
Required
What amount will be reported immediately following the business combination for each of the following items in the combined company’s balance sheet?
a. Common Stock.
b. Cash and Receivables.
c. Land.
d. Buildings and Equipment (net).
e. Goodwill.
f. Additional Paid-In Capital.
g. Retained Earnings.
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