On January 1, 2018, Peach Company issued 1,500 of its $20 par value common shares with a

Question:

On January 1, 2018, Peach Company issued 1,500 of its $20 par value common shares with a fair value of $60 per share in exchange for the 2,000 outstanding common shares of Swartz Company in a purchase transaction. Registration costs amounted to $1,700, paid in cash. Just prior to the acquisition, the balance sheets of the two companies were as follows:

image

image

Any difference between the book value of equity and the value implied by the purchase price relates to goodwill.

Required:

A. Prepare the journal entry on Peach Company?s books to record the exchange of stock.

B. Prepare a Computation and Allocation Schedule for the difference between book value and value implied by the purchase price.

C. Prepare a consolidated balance sheet at the date of acquisition.

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...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Advanced Accounting

ISBN: 978-1119373209

7th edition

Authors: Debra C. Jeter, Paul K. Chaney

Question Posted: