Problem

Balances Reported Following CombinationElm Corporation and Maple Company have announced te...

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.

Step-by-Step Solution

Request Professional Solution

Request Solution!

We need at least 10 more requests to produce the solution.

0 / 10 have requested this problem solution

The more requests, the faster the answer.

Request! (Login Required)


All students who have requested the solution will be notified once they are available.
Add your Solution
Textbook Solutions and Answers Search