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 | $ | 486,500 | $ | 67,350 | $ | 67,350 | |||||||||
Receivables | 250,500 | 391,000 | 391,000 | ||||||||||||
Inventory | 490,000 | 301,000 | 356,300 | ||||||||||||
Land | 637,500 | 203,000 | 182,700 | ||||||||||||
Building and equipment (net) | 840,000 | 303,000 | 364,900 | ||||||||||||
Franchise agreements | 317,000 | 226,000 | 260,100 | ||||||||||||
Accounts payable | (382,000 | ) | (166,000 | ) | (166,000 | ) | |||||||||
Accrued expenses | (169,000 | ) | (42,750 | ) | (42,750 | ) | |||||||||
Longterm liabilities | (1,140,000 | ) | (625,000 | ) | (625,000 | ) | |||||||||
Common stock$20 par value | (660,000 | ) | |||||||||||||
Common stock$5 par value | (210,000 | ) | |||||||||||||
Additional paidin capital | (70,000 | ) | (90,000 | ) | |||||||||||
Retained earnings, 1/1 | (547,500 | ) | (333,000 | ) | |||||||||||
Revenues | (1,034,000 | ) | (431,600 | ) | |||||||||||
Expenses | 981,000 | 407,000 | |||||||||||||
Note: Parentheses indicate a credit balance.
On December 31, Padre acquires Sols outstanding stock by paying $319,000 in cash and issuing 14,100 shares of its own common stock with a fair value of $40 per share. Padre paid legal and accounting fees of $23,500 as well as $8,800 in stock issuance costs.
Determine the value that would be shown in Padres consolidated financial statements for each of the accounts listed. (Input all amounts as positive values.)
Inventory, Land, Building and equipment, Franchise agreement, goodwill, revenues, additional paid-in capital, expenses, retained earning 1/1, and retained earning 12/31
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