Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included are fair values for Sol Company accounts. Padre

Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included are fair values for Sol Company accounts.

Padre

Company Sol Company

Book Values Book Values Fair Values

12/31 12/31 12/31

Cash $509,000 $57,350 $57,350

Receivables 234,750 304,000 304,000

Inventory 412,500 238,000 296,500

Land 725,000 154,000 133,000

Building and equipment (net) 685,000 407,000 476,700

Franchise agreements 274,000 226,000 257,800

Accounts payable (380,000) (195,000) (195,000)

Accrued expenses (145,000) (52,750) (52,750)

Longterm liabilities (917,500) (555,000) (555,000)

Common stock$20 par value (660,000)

Common stock$5 par value (210,000)

Additional paid-in capital (70,000) (90,000)

Retained earnings, 1/1 (627,500) (255,000)

Revenues (968,250) (420,600)

Expenses 928,000 392,000

Note: Parentheses indicate a credit balance.

On December 31, Padre acquires Sol's outstanding stock by paying $412,000 in cash and issuing 10,200 shares of its own common stock with a fair value of $40 per share. Padre paid legal and accounting fees of $22,800 as well as $10,500 in stock issuance costs.

Determine the value that would be shown in Padre's consolidated financial statements for each of the accounts listed.(Input all amounts as positive values.)

Worksheet Amounts

Inventory ????

Land ????

Buildings & Equipment ????

Franchise agreement ????

Goodwill ????

Revenues ????

Additional paid-in capital ????

Expenses ????

Retained earnings 1/1 ????

Retained earnings 12/31 ????

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

Forensic Accounting And Fraud Examination

Authors: Paul Barnes

1st Edition

1118454138, 978-1118454152

More Books

Students also viewed these Accounting questions

Question

d. Is it part of a concentration, minor, or major program?

Answered: 1 week ago

Question

Detailed note on the contributions of F.W.Taylor

Answered: 1 week ago

Question

1. To gain knowledge about the way information is stored in memory.

Answered: 1 week ago