Question
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 | $ | 193,250 | $ | 72,900 | $ | 72,900 | |||||||||
Receivables | 228,000 | 369,000 | 369,000 | ||||||||||||
Inventory | 602,500 | 190,000 | 242,200 | ||||||||||||
Land | 765,000 | 195,000 | 166,200 | ||||||||||||
Building and equipment (net) | 765,000 | 271,000 | 340,000 | ||||||||||||
Franchise agreements | 224,000 | 216,000 | 249,900 | ||||||||||||
Accounts payable | (350,000 | ) | (138,000 | ) | (138,000 | ) | |||||||||
Accrued expenses | (119,000 | ) | (47,500 | ) | (47,500 | ) | |||||||||
Long-term liabilities | (995,000 | ) | (552,500 | ) | (552,500 | ) | |||||||||
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 | (522,500 | ) | (251,000 | ) | |||||||||||
Revenues | (1,041,250 | ) | (352,900 | ) | |||||||||||
Expenses | 980,000 | 328,000 | |||||||||||||
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Note: Parentheses indicate a credit balance.
On December 31, Padre acquires Sols outstanding stock by paying $108,000 in cash and issuing 17,000 shares of its own common stock with a fair value of $40 per share. Padre paid legal and accounting fees of $24,300 as well as $10,300 in stock issuance costs. |
Determine the value that would be shown in Padres consolidated financial statements for each of the accounts listed. Inventory $844,700 Land $ 931,200 Bldgs & Equipment $ 1,105,000 Franchise agreem $ 473,900 Goodwill _______? Revenues $ -1,041,250 Addtnl Paid in Capital___________? Expenses____________? Retained Earnings 1/1 $ -522,500 Retained Earnings 12/31___________? Please help with the blanks!!!!!! All others are correct |
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