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Big Net Company acquire Smallport on 12/31. Use the information below: Exhibit 2.3 Basic Consolidation Information BigNet Company Book Values December 31 Current assets $
Big Net Company acquire Smallport on 12/31. Use the information below: Exhibit 2.3 Basic Consolidation Information BigNet Company Book Values December 31 Current assets $ 1.100.000 Computers and equipment (net) 1.300,000 Capitalized software (net) 500.000 Customer contracts -0- Notes payable (300,000) Net assets $ 2,600,000 Common stock-$10 par value S(1.600.000) Common stock-55 par value Additional paid-in capital (40,000) Retained earnings. 171 (870.000) Dividends declared 110.000 Revenues (1.000.000) Expenses 800.000 Owners' equity 12/31 $(2,600,000) Retained earnings. 12/31 (960.000) Smallport Company Book Values Fair Values December 31 December 31 $ 300,000 $ 300.000 400.000 600.000 100.000 1.200,000 -0- 700.000 (200.000 (250,000) $ 600,000 $2,550,000 $(100,000) (20,000) (370,000) 10,000 (500,000) 380.000 $(600,000) (480,000) Example 2-3: Big Net acquires Smallport Company on 12/31 by issuing 26,000 shares of $10 par common stock (FV $100 per share). Big Net pays fees of $40,0000 to a third party for its assistance in arranging the transaction. Also, Big Net promises to pay an additional $83,200 to former owners if Smallport's earnings exceed $300,000 in the next annual period. Big Net estimates that the present value of this additional payment is $20,000 Description Account Debit Credit 8 Big Net Company acquire Smallport on 12/31. Use the information below: Exhibit 2.3 Basic Consolidation Information BigNet Company Book Values December 31 Current assets $ 1.100.000 Computers and equipment (net) 1.300,000 Capitalized software (net) 500.000 Customer contracts -0- Notes payable (300,000) Net assets $ 2,600,000 Common stock-$10 par value S(1.600.000) Common stock-55 par value Additional paid-in capital (40,000) Retained earnings. 171 (870.000) Dividends declared 110.000 Revenues (1.000.000) Expenses 800.000 Owners' equity 12/31 $(2,600,000) Retained earnings. 12/31 (960.000) Smallport Company Book Values Fair Values December 31 December 31 $ 300,000 $ 300.000 400.000 600.000 100.000 1.200,000 -0- 700.000 (200.000 (250,000) $ 600,000 $2,550,000 $(100,000) (20,000) (370,000) 10,000 (500,000) 380.000 $(600,000) (480,000) Example 2-3: Big Net acquires Smallport Company on 12/31 by issuing 26,000 shares of $10 par common stock (FV $100 per share). Big Net pays fees of $40,0000 to a third party for its assistance in arranging the transaction. Also, Big Net promises to pay an additional $83,200 to former owners if Smallport's earnings exceed $300,000 in the next annual period. Big Net estimates that the present value of this additional payment is $20,000 Description Account Debit Credit 8
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