Question
Please use the information below to answer parts a, b and c. Grande Inc. acquired 100% of the voting common stock of Petite Inc. on
Please use the information below to answer parts a, b and c. Grande Inc. acquired 100% of the voting common stock of Petite Inc. on January 1, 2022. The book value and fair value of Petites accounts on that date (prior to creating the combination) are as follows, along with the book value of Grandes accounts:
| Grande Book Value | Petite Book Value | Petite Fair Value |
Cash and receivables | 280,000 | 135,000 | 135,000 |
Inventory | 340,000 | 190,000 | 175,000 |
Land | 490,000 | 300,000 | 330,000 |
Buildings (net) | 830,000 | 350,000 | 340,000 |
Equipment (net) | 655,000 | 115,000 | 110,000 |
Liabilities | 900,000 | 430,000 | 410,000 |
Common stock | 580,000 | 180,000 |
|
Additional paid-in capital | 730,000 | 250,000 |
|
Retained earnings, 1/1/22 | 385,000 | 230,000 |
|
Assume that Grande issued 15,000 shares of common stock, with a $5 par value and a $54 fair value, to obtain all of Petites outstanding stock. Please note that it would be easier to solve this problem assuming Grande dissolves Petite so that Petite is no longer a separate entity. A. In this acquisition transaction, how much goodwill should be recognized?
B. What will be the Jan 1, 2022 balance in consolidated Common Stock account after the acquisition is completed?
C. What will be the Jan 1, 2022 balance in consolidated Total Assets after the acquisition is completed?
THE ABOVE INFORMATION WAS ALL THAT WAS GIVEN. Please show work and highlight answer. PLEASE COMPLETE ALL PARTS AS IT IS A COMPOUNDING QUESTION and as part of Chegg's guidelines, compounding questions must be answered up to 4 parts.
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