P3.17 Acquisition with Bargain Gain In 2016, Tesla, Inc. acquired all of the outstanding stock of SolarCity Corporation. Tesla issued 0.110 shares of its common stock for each outstanding share of SolarCity, for a total of 11,124,497 shares. Fair value of Tesla's stock at the date of acquisition was $185.04 per share. Tesla also converted SolarCity employee options and restricted stock unit awards into equivalent awards in Tesla stock. The fair value of vested awards was $87.5 million, and the fair value of unvested awards was $95.9 million. Merger-related costs, paid in cash, totaled $21.7 million. Following are the estimated fair values of SolarCity assets acquired and liabilities assumed. Tesla's balance sheet accounts are shown just prior to the acquisition. Book values for Tesla and SolarCity bal- ance sheet accounts are assumed. Identifiable intangible assets acquired include developed technology, favorable leases, in-process R&D, and the trade name. Tesla SolarCity Book Value Dr (Cr) Book Value Dr (Cr) (in thousands) Fair Value Dr (Cr) $5,800,000 $ 400,000 4,800,000 $ 480,020 5,781,496 3,134,000 5,781,000 800,000 Current assets Solar energy systems, leased and to be leased. Operating lease vehicles ......... Property, plant and equipment, net .. Identifiable intangible assets .......... Other assets. ... Accounts payable and accrued liabilities. Debt and capital leases .. Deferred revenue and other liabilities... Capital stock ..... Retained deficit Accumulated other comprehensive loss .... Total ........ 526,000 (4,300,000) (2,456,000) (5,966,704) (5,628,023) 3,085,727 24,000 0 904,196 (475,000) (3,400,000) (2,391,290) (1,300,000) 662,094 1,056,312 356,510 838,772 (468,668) (3,403,840) (2,405,898) n/a n/a n/a $ 0 Assume Tesla recorded the acquisition as a stock investment. Required a. Prepare the journal entry Tesla made to record the acquisition on its own books. b. Prepare a working paper to consolidate the balance sheet accounts of Tesla and SolarCity at the date of acquisition c. Prepare a consolidated balance sheet at the date of acquisition.
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1. Tipul UCUNSULLULIUL WUINI Papel LU CULISUHudler du du du SIA L U SEL. 3.17 TESLA c. Prepare the consolidated balance sheet at the date of acquisition, in good form. Acquisition with Bargain Gain In 2016, Tesla, Inc. acquired all of the outstanding stock of LO 4 SolarCity Corporation. Tesla issued 0.110 shares of its common stock for each outstanding share of SolarCity, for a total of 11,124,497 shares. Fair value of Tesla's stock at the date of acquisition was $185.04 per share. Tesla also converted SolarCity employee options and restricted stock unit awards into [TSLA) equivalent awards in Tesla stock. The fair value of vested awards was $87.5 million, and the fair value of unvested awards was $95.9 million. Merger-related costs, paid in cash, totaled $21.7 million. Following are the estimated fair values of SolarCity assets acquired and liabilities assumed. Tesla's balance sheet accounts are shown just prior to the acquisition. Book values for Tesla and SolarCity bal- ance sheet accounts are assumed. Identifiable intangible assets acquired include developed technology, favorable leases, in-process R&D, and the trade name. Consolidated Financial Statements: Date of Acquisition SolarCity Tesla Book Value Dr (Cr) Fair Value Dr (Cr) Book Value Dr (Cr) $5,800,000 (in thousands) $ 400,000 4,800,000 $ 480,020 5,781,496 3,134,000 5,781,000 800,000 Current assets .... Solar energy systems, leased and to be leased.... . .... Operating lease vehicles ................ Property, plant and equipment, net ............. Identifiable intangible assets .................. Other assets........... Accounts payable and accrued liabilities. ....... Debt and capital leases ........... Deferred revenue and other liabilities. ........ Capital stock .............................. Retained deficit ............................ Accumulated other comprehensive loss ......... 526,000 (4,300,000) (2,456,000) (5,966,704) (5,628,023) 3,085,727 24,000 904,196 (475,000) (3,400,000) (2,391,290) (1,300,000) 662,094 1,056,312 356,510 838,772 (468,668) 3,103,840) 2,405,898) n/a n/a n/a Total ...... 0 Assume Tesla recorded the acquisition as a stock investment. Required a. Prepare the journal entry Tesla made to record the acquisition on its own books. b. Prepare a working paper to consolidate the balance sheet accounts of Tesla and SolarCity at the date of acquisition. c. Prepare a consolidated balance sheet at the date of acquisition. 1. Tipul UCUNSULLULIUL WUINI Papel LU CULISUHudler du du du SIA L U SEL. 3.17 TESLA c. Prepare the consolidated balance sheet at the date of acquisition, in good form. Acquisition with Bargain Gain In 2016, Tesla, Inc. acquired all of the outstanding stock of LO 4 SolarCity Corporation. Tesla issued 0.110 shares of its common stock for each outstanding share of SolarCity, for a total of 11,124,497 shares. Fair value of Tesla's stock at the date of acquisition was $185.04 per share. Tesla also converted SolarCity employee options and restricted stock unit awards into [TSLA) equivalent awards in Tesla stock. The fair value of vested awards was $87.5 million, and the fair value of unvested awards was $95.9 million. Merger-related costs, paid in cash, totaled $21.7 million. Following are the estimated fair values of SolarCity assets acquired and liabilities assumed. Tesla's balance sheet accounts are shown just prior to the acquisition. Book values for Tesla and SolarCity bal- ance sheet accounts are assumed. Identifiable intangible assets acquired include developed technology, favorable leases, in-process R&D, and the trade name. Consolidated Financial Statements: Date of Acquisition SolarCity Tesla Book Value Dr (Cr) Fair Value Dr (Cr) Book Value Dr (Cr) $5,800,000 (in thousands) $ 400,000 4,800,000 $ 480,020 5,781,496 3,134,000 5,781,000 800,000 Current assets .... Solar energy systems, leased and to be leased.... . .... Operating lease vehicles ................ Property, plant and equipment, net ............. Identifiable intangible assets .................. Other assets........... Accounts payable and accrued liabilities. ....... Debt and capital leases ........... Deferred revenue and other liabilities. ........ Capital stock .............................. Retained deficit ............................ Accumulated other comprehensive loss ......... 526,000 (4,300,000) (2,456,000) (5,966,704) (5,628,023) 3,085,727 24,000 904,196 (475,000) (3,400,000) (2,391,290) (1,300,000) 662,094 1,056,312 356,510 838,772 (468,668) 3,103,840) 2,405,898) n/a n/a n/a Total ...... 0 Assume Tesla recorded the acquisition as a stock investment. Required a. Prepare the journal entry Tesla made to record the acquisition on its own books. b. Prepare a working paper to consolidate the balance sheet accounts of Tesla and SolarCity at the date of acquisition. c. Prepare a consolidated balance sheet at the date of acquisition
