Incomplete Data on Creation of Subsidiary
Thumb Company created New Company as a wholly owned subsidiary by transferring assets and accounts payable to New in exchange for its common stock. New recorded the following entry when it received the assets and accounts payable:
Cash | 3,000 |
|
Accounts Receivable | 16,000 |
|
Inventory | 27,000 |
|
Land | 9,000 |
|
Buildings | 70,000 |
|
Equipment | 60,000 |
|
Accounts Payable |
| 14,000 |
Accumulated Depreciation- Buildings |
| 21,000 |
Accumulated Depreciation- Equipment |
| 12,000 |
Common Stock |
| 40,000 |
Additional Paid-In Capital |
| 98,000 |
Required
a. What was Thumb’s book value of the total assets transferred to New Company?
b. What amount did Thumb report as its investment in New after the transfer?
c. What number of shares of $5 par value stock did New issue to Thumb?
d. What impact did the transfer of assets and accounts payable have on the amount reported by Thumb as total assets?
e. What impact did the transfer of assets and accounts payable have on the amount that Thumb and the consolidated entity reported as shares outstanding?
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.