Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Glen Co. acquires 100 percent of the outstanding voting shares of Nutley Company on January 1, 2021. To obtain these shares, Glen pays $400 cash

image text in transcribedGlen Co. acquires 100 percent of the outstanding voting shares of Nutley Company on January 1, 2021. To obtain these shares, Glen pays $400 cash (in thousands) and issues 10,000 shares of $20 par value common stock on this date. Glen's stock had a fair value of $36 per share on that date. Glen also pays $15 (in thousands) to a local investment firm for arranging the acquisition. An additional $10 (in thousands) was paid by Glen in stock issuance costs. The book values for both Glen and Nutley immediately preceding the acquisition follow. The fair value of each of Glen and Nutley accounts is also included. In addition, Nutley 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.

Glen Co. acquires 100 percent of the outstanding voting shares of Nutley Company on January 1, 2021. To obtain these shares, Glen pays $400 cash (in thousands) and issues 10,000 shares of $20 par value common stock on this date. Glen's stock had a fair value of $36 per share on that date. Glen also pays $15 (in thousands) to a local investment firm for arranging the acquisition. An additional $10 (in thousands) was paid by Glen in stock issuance costs. The book values for both Glen and Nutley immediately preceding the acquisition follow. The fair value of each of Glen and Nutley accounts is also included. In addition, Nutley 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. GLEN CO. CASH RECEIVABLES INVENTORY LAND BUILDINGS (NET) EQUIPMENT ACCOUNTS PAYABLE LONG-TERM LIABILITIES COMMON STOCK ADDITIONAL PAID-IN CAPITAL RETAINED EARNINGS 900 480 660 300 1,200 360 480 1,140 1,000 200 1,080 NUTLEY COMPANY Book Fair Value Value $ 80 $ 80 180 160 260 300 120 130 220 280 100 75 60 60 340 300 80 0 480 1) What amount will be reported for goodwill as a result of this acquisition? 2) What amount will be reported for consolidated additional paid-in capital? 3) What amount will be reported for consolidated cash after the acquisition is completed

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

Money And Wealth

Authors: Joslyn Pine

1st Edition

0486486389, 9780486486383

More Books

Students also viewed these Accounting questions