Assume the date of acquisition in January 1, so neither company has any revenues or expenses yet Assume that these figures are AFTER Big paid $3,000 in cash to the shareholders of Small to buy all the stock Assume Small is NOT dissolved, but remains a subsidiary Account Book Values, Big Book Values, Small Fair Values, Small Cash 500 400 400 Receivables 1,000 300 280 Inventory 1,500 500 720 Fixed assets (net) 9,000 700 900 Patents 0 0 700 Investment in Small 3,000 Liabilities (3,500) (1,100) (1,100) Totals 11,500 800 1,900 Common Stock ($2 par) 500 Common stock ($1 par) 100 Additional Paid in capital 3,000 220 Retained Earnings 8,000 480 Compute the amount of the goodwill, or bargain purchase gain, in this deal As acquisition date, what will be total consolidated cash As of the acquisition date , what are the consolidated fixed assets As of the acquisition date, what are the consolidated retained earnings As of the acquisition date, what is the correct consolidated additional paid in capital As of the acquisition date, what is the correct consolidated common stock As of the acquisition date, what is the correct consolidated investment in Small Big did not dissolve Small On the date of the acquisition, Big had credited cash, and debited investment in Small Give the appropriate consolidation entry or entries that would be needed on a worksheet Hint see entries S and A in the text

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Posted on Oct 24, 2020

Assume the date of acquisition in January 1, so neither company has any revenues or expenses yet. Assume that these figures are AFTER Big paid

Assume the date of acquisition in January 1, so neither company has any revenues or expenses yet. Assume that these figures are AFTER Big paid $3,000 in cash to the shareholders of Small to buy all the stock. Assume Small is NOT dissolved, but remains a subsidiary.

Account	Book Values, Big	Book Values, Small	Fair Values, Small
Cash	500	400	400
Receivables	1,000	300	280
Inventory	1,500	500	720
Fixed assets (net)	9,000	700	900
Patents	0	0	700
Investment in Small	3,000
Liabilities	(3,500)	(1,100)	(1,100)
Totals	11,500	800	1,900
Common Stock ($2 par)	500
Common stock ($1 par)		100
Additional Paid-in capital	3,000	220
Retained Earnings	8,000	480

Compute the amount of the goodwill, or bargain purchase gain, in this deal.
As acquisition date, what will be total consolidated cash?
As of the acquisition date , what are the consolidated fixed assets?
As of the acquisition date, what are the consolidated retained earnings?
As of the acquisition date, what is the correct consolidated additional paid-in capital?
As of the acquisition date, what is the correct consolidated common stock?
As of the acquisition date, what is the correct consolidated investment in Small?
Big did not dissolve Small. On the date of the acquisition, Big had credited cash, and debited investment in Small. Give the appropriate consolidation entry or entries that would be needed on a worksheet. Hint – see entries S and A in the text