Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Exercise 2-6 Pritano Company acquired all the net assets of Succo Company on December 31, 2013, for $2,372,120 cash. The balance sheet of Succo Company

image text in transcribed

image text in transcribed

image text in transcribed

Exercise 2-6 Pritano Company acquired all the net assets of Succo Company on December 31, 2013, for $2,372,120 cash. The balance sheet of Succo Company immediately prior to the acquisition showed Current assets Plant and equipment Total Book value Fair value 1,016,860 $1,016,850 1,155,510 1,384,170 $2,172,370 $2,401,030 $169,930 $231,530 Liabilities Common stock Other contributed capital 524,810 603,000 874,630 $2,172,370 Retained earnings Total As part of the negotiations, Pritano Company agreed to issue 9,360 additional shares of its $10 par value common stock to the stockholders of Succo if the average postcombination earnings over the next three years equaled or exceeded $2,598,000. The fair value of the contingent consideration on the date or acquisition was estimated to be $199,800. The contingent consideration (earnout) was classified as equity rather than as a liability

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Reporting Analysis And Decision Making

Authors: Shirley Carlon, Rosina Mladenovic Mcalpine, Chrisann Palm, Lorena Mitrione, Ngaire Kirk, Lily Wong

5th Edition

0730313743, 978-0730313748

More Books

Students also viewed these Accounting questions

Question

Did you trace the accomplishments, issues, and milestones?

Answered: 1 week ago