1. Dish Corporation acquired 100 percent of the common stock of Toll Company by issuing 10,000 shares of $10 par common stock with a market value of $60 per share. Summarized balance sheet data for the two companies immediately preceding the acquisition are as follows:

Dish	Corp	Toll	Co.
Book Value	Fair Value	Book Value	Fair Value
Total Assets	$1,200,000	$1,500,000	$900,000	$1,300,000
Total Liabilities	$800,000	$700,000	$600,000	$750,000
Total Stockholders' Equity	400,000		$300,000
	$1,200,000	$900,000

Required:

Determine the dollar amounts to be presented in the consolidated balance sheet for (1) total assets, (2) total liabilities, and (3) total stockholders' equity.

In the answer provided, assuming the total assets are calculated correctly, how is goodwill $50,000? Wouldn't it be a higher amount since 100% of the common stock was acquired?

Chapter 4 Discussion Problems 1. Dish Corporation acquired 100 percent of the common stock of Toll Company by issuing 10,000 shares of $10 par common stock with a market value of $60 per share. Summarized balance sheet data for the two companies immediately preceding the acquisition are as follows: Total Assets Total Liabilities Total Stockholders' Equity Dish Corp Book Value Fair Value $1,200,00 $1,500,00 0 0 $800,000 $700,000 Toll Co. Book Value Fair Value $1,300,00 $900,000 0 $600,000 $750,000 400,000 $1,200,00 0 $300,000 $900,000 Required: Determine the dollar amounts to be presented in the consolidated balance sheet for (1) total assets, (2) total liabilities, and (3) total stockholders' equity. Total assets = $2,550,000 = ($1,200,000 + $1,300,000 + $50,000 GW) Total liabilities = $1,550,000 = ($800,000 + $750,000) Total stockholders' equity = $1,000,000 = [$400,000 + ($60 x 10,000 shares)] 2. Top Company obtained 100 percent of Bottom Company's common stock on January 1, 20X6, by issuing 12,500 shares of its own common stock, which had a $5 par value and a $15 fair value on that date. Bottom reported a net book value of $150,000 and its shares had a $20 per share fair value on that date. However, some of its plant assets (with a 5-year remaining life) were undervalued by $20,000 in the company's accounting records. Bottom had also developed a customer list with an estimated fair value of $10,000 and a remaining life of 10 years. Top Company uses the equity method to account for its investment in Bottom. During 20X6, Top and Bottom reported the following: Net Income Dividends Declared TOP $300,000 25,000 BOTTOM $200,000 15,000 Prepare each of the journal entries listed below related to Top's investment in Bottom. 1. 2. 3. 4. Top's acquisition of Bottom. Top's share of Bottom's 20X6 income. Top's share of Bottom's 20X6 dividend income. Top's amortization of excess acquisition price. 3. Paco Company acquired 100 percent of the stock of Garland Corp. on December 31, 20X8. The stockholder's equity section of Garland's balance sheet at that date is as follows: Common Stock Additional Paid in Capital Retained Earnings Total SE $300,000 500,000 400,000 $1,200,000 Paco financed the acquisition by using $880,000 cash and giving a note payable for $400,000. Book value approximated fair value for all of Garland's assets and liabilities except for buildings which had a fair value $60,000 more than its book value and a remaining useful life of 10 years. Any remaining differential was related to goodwill. Paco has an account payable to Garland in the amount of $30,000. What are the eliminating entries needed to prepare a consolidated balance sheet immediately following the acquisition? 1) 2) 1) 2)