Question
Gill Corporation had the following account balances at 12/1/17: Receivables $ 96,000 Inventory 240,000 Land 720,000 Building 600,000 Liabilities 480,000 Common Stock 120,000 Additional Paid-In
Gill Corporation had the following account balances at 12/1/17:
Receivables | $ 96,000 |
Inventory | 240,000 |
Land | 720,000 |
Building | 600,000 |
Liabilities | 480,000 |
Common Stock | 120,000 |
Additional Paid-In Capital | 120,000 |
Retained Earnings, 12/1/16 | 840,000 |
Revenues | 360,000 |
Expenses | 264,000 |
Several of Gill's accounts have fair values that differ from book value. The fair values are: Land $500,000; Building $700,000; Inventory $330,000; and Liabilities $400,000.
Graves Inc. acquired all of the outstanding common shares of Gill by issuing 20,000 shares of common stock having a $6 par value, but a $65 fair value. Stock issuance costs amounted to $12,000. Direct combination costs amounted to $15,000. Graves also agreed to pay $30,000 to the former owners of Gill contingent on meeting certain revenue goals during the following year. Graves estimated the present value of its probability adjustment expected payment for the contingency at $18,000.
. Assume dissolution of the subsidiary has occurred. Record the journal entries to merge the subsidiary records with the parent company.
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