Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On January 1, 2022, Positive Corporation acquired Super Corporation's net assets by paying 205,000 cash. Balance sheet data for the positive & Super and fair

On January 1, 2022, Positive Corporation acquired Super Corporation's net assets by paying €205,000 cash. Balance sheet data for the positive & Super and fair value information for Super immediately before the business combination are given below:

Positive Super Assets Book Value Book Value Fair Value Cash & receivables 125,000 27,500 20,000 Inventory 35,000 46,000 47,500 Land 174,500 92,000 112,000 Patent 35,500 25,000 Plant, Property and Equipment 280,000 135,000 97,500 Less: Accumulated Depreciation -65,000 -53,000 Total 585,000 247,500 302,000 Liabilities and Stockholders' Equity Accounts Payable 75,500 47,500 50,000 Notes Payable 140,000 62,500 62,500 Common Stock 100,000 40,000 Additional Paid-in Capital Retained Earnings 97,500 65,000 172,000 32,500 Total 585,000 247,500 Required: a. Prepare the journal entry to record the acquisition of Super Corporation. (35 points). b. What would the balance of land be in the balanced sheet of combined company immediately after the combination? (5 points). c. What would the balance of accounts payable be in the balanced sheet of combined company immediately after the combination? (5 points). d. What would the balance of common stock be in the balanced sheet of combined company immediately after the combination? (5 points).

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Journal Entries Cash Receivable Dr 27500 Inventory Dr 46000 Land Dr 92000 PPE Dr 135000 Goodwil... 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

Intermediate Accounting IFRS

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

4th Edition

1119607515, 978-1119607519

More Books

Students also viewed these Accounting questions

Question

What is meant by general-purpose financial statements?

Answered: 1 week ago