Question
On January 2, 2016, Revolution Co. issued 150,000 new shares of its $1 par value common stock valued at $16 a share for all of
On January 2, 2016, Revolution Co. issued 150,000 new shares of its $1 par value common stock valued at $16 a share for all of Founders, Inc.s outstanding common shares. The fair value and book value of Founders identifiable assets and liabilities were the same. Summarized balance sheet information for both companies just before the acquisition on January 2, 2016, is as follows:
| Revolution | Founders | |
| Cash | $ 250,000 | $ 180,000 |
| Inventories | $ 320,000.00 | $ 600,000.00 |
| Other Current Assets | $ 600,000.00 | $ 400,000.00 |
| Land | $ 350,000.00 | $ 500,000.00 |
| Property, Plant & Equipment | $ 5,100,000.00 | $ 2,000,000.00 |
| Total Assets | $6,620,000 | $3,680,000 |
| Accounts Payable | $ 800,000 | $ 350,000.00 |
| Notes Payable | $ 1,800,000.00 | $ 1,150,000.00 |
| Common Stock, $1 par | $ 2,000,000.00 | $ 1,000,000.00 |
| Additional Paid-in Capital | $ 1,000,000.00 | $ 350,000.00 |
| Retained Earnings | $ 1,020,000.00 | $ 830,000.00 |
| Total Liabilities & Equities | $ 6,620,000.00 | $ 3,680,000.00 |
Required: Prepare a consolidated balance sheet for Revolution Co. immediately after the business combination.
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The Only Tax Audit Guide Youll Ever Need
Authors: Janet M. Sydlaske, Richard K. Millcroft
1st Edition
0471510769, 978-0471510765
