Asset acquisition vs. stock acquisition (fair value is different from book value) The following financial statement information is for an investor company and an investee company on January 1, 2013. On January 1, 2013, the investor company's common stock had a traded market value of $87.5 per share, and the investee company's common stock had a traded market value of $77.5 per share.

	Book Values		Fair Values
	Investor	Investee	Investor	Investee
Receivables & inventories	$250,000	$125,000	$225,000	$112,500
Land	500,000	250,000	750,000	375,000
Property & equipment	562,500	250,000	625,000	325,000
Trademarks & patents	_	_	375,000	200,000
Total assets	$1,312,500	$625,000	$1,975,000	$1,012,500
Liabilities	$375,000	$200,000	$450,000	$237,500
Common stock ($1 par)	50,000	25,000
Additional paid-in capital	700,000	375,000
Retained earnings	187,500	25,000
Total liabilities & equity	$1,312,500	$625,000
Net assets	$937,500	$425,000	$1,525,000	$775,000

Required (Parts a. and b. are independent of each other.) a. Assume that the investor company issued 9,500 new shares of the investor company's common stock in exchange for all of the individually identifiable assets and liabilities of the investee company. The financial information presented, above, was prepared immediately before this transaction. Provide the Investor Company's balances (i.e., on the investor's books, before consolidation) for the following accounts immediately following the acquisition of the investee's net assets:

Receivables & Inventories	Answer
Land	Answer
Property & Equipment	Answer
Trademarks & Patents	Answer
Investment in Investee	Answer
Goodwill	Answer
Total Assets	Answer
Liabilities	Answer
Common Stock ($1 par)	Answer
Additional Paid-In Capital	Answer
Retained Earnings	Answer
Total Liabilities and Equity	Answer

b. Assume that the investor company issued 9,500 new shares of the investor company's common stock in exchange for all of the investee company's common stock. The financial information presented, above, was prepared immediately before this transaction. Provide the Investor Company's balances (i.e., on the investor's books, before consolidation) for the following accounts immediately following the acquisition of the investee's net assets:

Receivables & Inventories	Answer
Land	Answer
Property & Equipment	Answer
Trademarks & Patents	Answer
Investment in Investee	Answer
Goodwill	Answer
Total Assets	Answer
Liabilities	Answer
Common Stock ($1 par)	Answer
Additional Paid-In Capital	Answer
Retained Earnings	Answer
Total Liabilities and Equity	Answer