Question
I am looking at Problem 2-1 in the textbook (Advanced Accounting 5th Edition) which states that we need to prepare journal entries. The condensed balance
I am looking at Problem 2-1 in the textbook (Advanced Accounting 5th Edition) which states that we need to prepare journal entries. The condensed balance sheets gives the following:
| Phillips | Solina |
Current assets | 180,000 | 85,000 |
Plant and equip | 450,000 | 140,000 |
Total assets | 630,000 | 225,000 |
Total Liabilities | 95,000 | 35,000 |
Common stock $10 par value | 350,000 | 160,000 |
Other contributed capital | 125,000 | 53,000 |
Retained Earnings (deficit) | 60,000 | -23,000 |
Total Liab and Equity | 630,000 | 225,000 |
The following is what I am coming up as my solution for my journal entries:The plant & equip has a fair value of $150,000 on date of consolidation and Phillips, who is the acquiring Solina, incurred direct acquisition cost of $20,000 and stock issue cost $6,000. Phillips has agreed to issue 20,000 shares of its $10 par stock to acquire all the net asset of Solina at a time when the fair value was at $15 per share.
total current asset | 85,000 | |
total plant & equip | 15,000 | |
acquisition fees | 20,000 | |
security issue cost | 6,000 | |
Goodwill | 100,000 | |
total liabilities | 35,000 | |
common stock (20,000 x $10) | 200,000 | |
common stock (20,000 x ($15 - 10)) | 100,000 | |
Would greatly appreciate any help on this.
Regards,
Dee
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