Question
Summer 20 Company acquired 100% of the voting common stock of Towel, Corp on January 1, 2020. Book and fair values as of January 1,
Summer 20 Company acquired 100% of the voting common stock of Towel, Corp on January 1, 2020. Book and fair values as of January 1, 2020 are below.
Assume that Summer 20 issued 11,000 shares of common stock with a $5 par value and a $50 fair value to obtain all of Towel's outstanding stock. After this acquisition transaction, how much would the consolidated LAND balance be? Show and label all work for credit.
| Summer 20 Book Value | Towel Corp Book Value | Towel Corp Fair Value | |
| Retained Earnings 1/1/20 | $280,000 | $260,000 | |
| Cash and Receivables | $170,000 | $75,000 | $70,000 |
| Inventory | $260,000 | $155,000 | $180,000 |
| Land | $280,000 | $245,000 | $255,000 |
| Buildings (net) | $480,000 | $240,000 | $270,000 |
| Equipment (net) | $120,000 | $90,000 | $90,000 |
| Liabilities | $650,000 | $425,000 | $420,000 |
| Common Stock | $360,000 | $75,000 | |
| Additional Paid in Capital | $20,000 | $45,000 |
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Internal Auditing Assurance & Advisory Services
Authors: Urton L. Anderson, Michael J. Head, Sridhar Ramamoorti, Cris Riddle, Mark Salamasick, Paul J. Sobel
4th Edition
0894139878, 978-0894139871
