Question
Problem 2-24 (LO 2-4, 2-5, 2-6a, 2-6b, 2-6c) Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included
Problem 2-24 (LO 2-4, 2-5, 2-6a, 2-6b, 2-6c)
Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included are fair values for Sol Company accounts.
Padre
Company
Sol Company
Book Values Book Values. Fair Values
12/31. 12/31. 12/31
Cash $323,750$78,250$78,250
Receivables222,750346,000346,000
Inventory510,000218,000269,900
Land622,500214,000189,500
Building and equipment (net)845,000307,000375,000
Franchise agreements296,000196,000226,300
Accounts payable(333,000)(198,000)(198,000)
Accrued expenses(141,000)(32,250)(32,250)
Longterm liabilities(1,122,500)(502,500)(502,500)
Common stock$20 par value(660,000)(book values 12/31 1st colunm)
(Common stock$5 par value (210,000)(book values 12/31 second colunm)
Additional paid-in capital(70,000)(90,000)
Retained earnings, 1/1(430,000)(299,000)
Revenues(1,030,500)(389,500)
Expenses967,000362,000
Note: Parentheses indicate a credit balance.
On December 31, Padre acquires Sol's outstanding stock by paying $405,000 in cash and issuing 10,700 shares of its own common stock with a fair value of $40 per share. Padre paid legal and accounting fees of $22,900 as well as $11,600 in stock issuance costs.
Determine the value that would be shown in Padre's consolidated financial statements for each of the accounts listed.(Input all amounts as positive values.)
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