Pan Company issued 960,000 shares of $10 par common stock with a fair value of $20,400,000 for

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Pan Company issued 960,000 shares of $10 par common stock with a fair value of $20,400,000 for all the voting common stock of Set Company. In addition, Pan incurred the following costs:

Legal fees to arrange the business combination ............................................. $200,000

Cost of SEC registration, including accounting and legal fees .............................. 96,000

Cost of printing and issuing net stock certificates ............................................. 24,000

Indirect costs of combining, including allocated overhead and executive salaries ...... 160,000

Immediately before the acquisition in which Set Company was dissolved, Set's assets and equities were as follows (in thousands):

Book Value Fair Value

Current assets ................. $ 8,000 .............. $ 8,800

Plant assets .................... 12,000 ............... 17,600

Liabilities ....................... 2,400 ................. 2,400

Common stock ............... 16,000

Retained earnings ............. 1,600

Required

Prepare all journal entries on Pan's books to record the acquisition.

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...
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Related Book For  book-img-for-question

Advanced Accounting

ISBN: 978-0133451863

12th edition

Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith

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