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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

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, 2016. On January 1, 2016, the investor companys common stock had a traded market value of $35 per share, and the investee companys common stock had a traded market value of $31 per share.

Book Values Fair Values
Investor Investee Investor Investee
Receivables & inventories $150,000 $75,000 $135,000 $67,500
Land 300,000 150,000 450,000 225,000
Property & equipment 337,500 150,000 375,000 195,000
Trademarks & patents 225,000 120,000
Total assets $787,500 $375,000 $1,185,000 $607,500
Liabilities $225,000 $120,000 $270,000 $142,500
Common stock ($1 par) 30,000 15,000
Additional paid-in capital 420,000 225,000
Retained earnings 112,500 15,000
Total liabilities & equity $787,500 $375,000
Net assets $562,500 $255,000 $915,000 $465,000

Required (Parts a. and b. are independent of each other.) a. Assume that the investor company issued 14,250 new shares of the investor companys 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 Companys balances (i.e., on the investors books, before consolidation) for the following accounts immediately following the acquisition of the investees 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

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