Question
Problem 2-25 (Algo) (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
Problem 2-25 (Algo) (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 | $ | 262,500 | 46,850 | $ | 46,850 | |||
Receivables | 251,250 | 358,000 | 358,000 | |||||
Inventory | 432,500 | 305,000 | 356,400 | |||||
Land | 762,500 | 163,000 | 141,500 | |||||
Building and equipment (net) | 637,500 | 320,000 | 387,100 | |||||
Franchise agreements | 232,000 | 268,000 | 303,000 | |||||
Accounts payable | (314,000 | ) | (183,000 | ) | (183,000 | ) | ||
Accrued expenses | (121,000 | ) | (33,250 | ) | (33,250 | ) | ||
Longterm liabilities | (927,500 | ) | (670,000 | ) | (670,000 | ) | ||
Common stock$20 par value | (660,000 | ) | ||||||
Common stock$5 par value | (210,000 | ) | ||||||
Additional paidin capital | (70,000 | ) | (90,000 | ) | ||||
Retained earnings, 1/1 | (440,000 | ) | (249,000 | ) | ||||
Revenues | (1,052,750 | ) | (360,600 | ) | ||||
Expenses | 1,007,000 | 335,000 | ||||||
Note: Parentheses indicate a credit balance.
On December 31, Padre acquires Sols outstanding stock by paying $393,000 in cash and issuing 10,400 shares of its own common stock with a fair value of $40 per share. Padre paid legal and accounting fees of $20,400 as well as $9,200 in stock issuance costs.
Determine the value that would be shown in Padres consolidated financial statements for each of the accounts listed. (Input all amounts as positive values.)
X Answer is complete but not entirely correct. Accounts Amounts Inventory $ 788,900 Land Buildings and equipment Franchise agreements $ 904,000 $ 1,024,600 $ 535,000 $ 102,400 Goodwill Revenues Additional paid-in capital Expenses Retained earnings, 1/1 Retained earnings, 12/31 $ 1,052,750 $ 268,800 $ 1,342,000 X $ 440,000 $ 465,350Step by Step Solution
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