On June 30, 200X Carl Corporation purchased Lin Company by issuing 50,000 shares of stock. Stock has a market value of $15.00 per share. This acquisition is to be recorded as a statutory merger through asset acquisition. In this type of business combination Carl company acquires all the assets and liabilities of Lin Company. Lin Company is dissolved and goes out of business. Prepare the entries the purchase and combination on June 30, 200X. Following information is shown prior to the merger activity being recorded: Carl Company Assets Liabilities and Capital Cash $ 80,000 Current Liabilities $ 80,000 Inventories 80,000 Plant 300,000 Common Stock $5PV 10,000 Land 20,000 Additional Paid in Capital 190,000 Retained Earnings 200,000 Total $480,000 Total $480,000 Lin Company Assets Liabilities and Capital Cash $200,000 Current Liabilities $100,000 Accounts Receivable 20,000 Common Stock $10PV 150,000 Plant Assets 530,000 Additional Paid in Capital 400,000 Retained Earnings 100,000 Total $750,000 Total $750,000 Other information: The Lin Company Plant Assets fair market value is $600,000. The out of pocket costs of the merger are: SEC Registration Statement fee $20,000 Legal fees for the SEC Registration Statement $15,000 Accounting fees for the SEC Registration Statement $ 5,000 Finders Fee $ 6,000 Legal fees for the merger $ 2,000 Accounting fees for the merger $ 4,000 1. Prepare and post the entries to record this as a statutory merger. In a statutory merger permanent dissolution of the subsidiary occurs at the combination date. 2. Prepare an after merger balance sheet.

Unit 2 Post 1 Mer Temp.xls [Compatibility Mode] a- Search Sheet Share Insert Page Layout Formulas Data Review View Cut Copy General Wrap Text 41 Fill [Merge & Center, 'A, $, % , 4: conditional Format Cell Formatting as Table Styles Sort & B I u , -, ..EeE insert Delete Format Clear F24 S T L MN SEC Registration Fae SEC Registration agal fees Findes fee Merger legal feos Marger accounting foes 20,000 stock issue 6,000 meger 2.000 merger 228.000 Liabilibes Accts. Rec 20.000 Inventory 80.000 Capdal Slock 260,000 690.000 148.000 00 Paid n capital 20.000 Retained eamings 12 Merger Expense Capital Stock Toal 12T.000Total Paid in Captal 20,000 17 Investmant in Lin Company Paid in Capila Common Slock Paid in Captal 23 25 27 Accounts receivable Retained Eam 200,000 Investment in Lin Co. 30 32 Book value of Lin Co Excess fair value over book 35 36 Alocated to plant + 100% Unit 2 Post 1 Mer Temp.xls [Compatibility Mode] a- Search Sheet Share Insert Page Layout Formulas Data Review View Cut Copy General Wrap Text 41 Fill [Merge & Center, 'A, $, % , 4: conditional Format Cell Formatting as Table Styles Sort & B I u , -, ..EeE insert Delete Format Clear F24 S T L MN SEC Registration Fae SEC Registration agal fees Findes fee Merger legal feos Marger accounting foes 20,000 stock issue 6,000 meger 2.000 merger 228.000 Liabilibes Accts. Rec 20.000 Inventory 80.000 Capdal Slock 260,000 690.000 148.000 00 Paid n capital 20.000 Retained eamings 12 Merger Expense Capital Stock Toal 12T.000Total Paid in Captal 20,000 17 Investmant in Lin Company Paid in Capila Common Slock Paid in Captal 23 25 27 Accounts receivable Retained Eam 200,000 Investment in Lin Co. 30 32 Book value of Lin Co Excess fair value over book 35 36 Alocated to plant + 100%