Duko Corporation is acquiring the net assets, exclusive of cash, of Weber Company as of January 1,

Question:

Duko Corporation is acquiring the net assets, exclusive of cash, of Weber Company as of January 1, 2015, at which time Weber Company's balance sheet is as follows:

Duko Corporation feels that the following fair values should be used for Weber's book values:
Cash (no change)....................................................$ 30,000
Accounts receivable...................................................60,000
Investment in marketable securities................................150,000
Land....................................................................450,000
Buildings (no change)................................................450,000
Equipment.............................................................600,000
Accounts payable....................................................120,000
Income tax payable (no change)...................................190,000
Duko will issue 20,000 shares of its common stock with a $2 par value and a quoted fair value of $60 per share on January 1, 2015, to Weber Company to acquire the net assets. Duko also agrees that two years from now it will issue additional securities to compensate Weber shareholders for any decline in value below that on the date of issue. The estimated settlement amount is $20,000. This is considered to be an equity agreement (not a liability).
1. Record the acquisition on the books of Duko Corporation on January 1, 2015. Include support for calculations used to arrive at the values assigned to the assets and liabilities. Use value analysis to aid your solution.
2. Record settlement (if any) for contingent consideration on January 1, 2017, assuming that the quoted value of the Duko stock is $57.50. (Round shares to nearest whole share.)

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...