Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On January 1, 2018, Nylah Corporation issued 10,000 shares of its own $10 par value common stock for 9,000 shares of the outstanding stock of

On January 1, 2018, Nylah Corporation issued 10,000 shares of its own $10 par value common stock for 9,000 shares of the outstanding stock of Berry Corporation in an acquisition. Nylah common stock at January 1, 2018 was selling at $70 per share. Just before the business combination, balance sheet information of the two corporations was as follows:

Nylah Book Value: Berry Book Value: Berry Fair Value

Cash $25,000:$12,000:$12,000

Inventories $55,000:$32,000:$36,000

Other current assets $110,000:$90,000:$110,000

Land $100,000:$30,000:$90,000

Plant and equipment-net $660,000:$250,000:$375,000

Liabilities $220,000:$50,000:$50,000

Capital stock, $10 par value $500,000:$100,000

Additional paid-in capital $170,000:$40,000

Retained earnings $60,000:$224,000

Required:

1. Show preliminary computations

2. Prepare a schedule to allocate excess of cost over book value

3. Prepare the journal entry on Nylah Corporation's books to account for the business combination

4. Prepare a consolidated balance sheet for Nylah Corporation and Subsidiary immediately after the business combination. Properly label all items. Complete working paper before preparing consolidated balance sheet.

5. Give all eliminating journal entries

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

Accounting For Managers Interpreting Accounting Information For Decision Making

Authors: Paul M. Collier, Sandy M. Kizan, Eckhard Schumann

1st Canadian Edition

1118037960, 9781118037966

More Books

Students also viewed these Accounting questions