Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Flynn acquires 100 percent of the outstanding voting shares of Macek Company on January 1, 2022. To obtain these shares, Flynn pays $500 (in thousands)

Flynn acquires 100 percent of the outstanding voting shares of Macek Company on January 1, 2022. To obtain these shares, Flynn pays $500 (in thousands) and issues 10,000 shares of $20 par value common stock on this date. Flynn's stock had a fair value of $40 per share on that date. Flynn also pays $15 (in thousands) to a local investment firm for arranging the transaction. An additional $10 (in thousands) was paid by Flynn in stock issuance costs.

The preacquisition book values for both Flynn and Macek as of January 1, 2022 follow.

The fair value of each of Macek accounts are also included. In addition, Macek holds a fully amortized trademark that still retains a $40 (in thousands) value. The figures below are in thousands. Any related question also is in thousands.

Flynn, Inc Macek Company Book Value Fair Value Cash $ 900 $ 80 $ 80 Receivables 480 180 160 Inventory 660 260 300 Land 300 120 130 Buildings (net) 1,200 220 280 Equipment 360 100 75 Bonds payable 1620 340 300 Common stock 1,000 340 Additional paid in capital 1,200 80 Retained earnings 1,080 480 Required: Compute the amounts requested . All answers must be in thousands

1. What is the amount of goodwill?

2. What is the amount will be reported for consolidated receivables?

3. What amount will be reported for consolidated cash?

4. What amount will be reported for consolidated common stock?

5. What amount will be reported for consolidated additional paid-in capital?

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_2

Step: 3

blur-text-image_3

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

The Accounting And Financial Audit

Authors: Landry Kouamé

1st Edition

620430481X, 978-6204304816

More Books

Students also viewed these Accounting questions