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Posted on Sep 04, 2024

The entire question is below: The balance sheets and fair values of Pretty Corporation and Silly Corporation at 12/31/X3 are as follows: Book Value Fair

The entire question is below:

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The balance sheets and fair values of Pretty Corporation and Silly Corporation at 12/31/X3 are as follows: Book Value Fair Value Book Value Fair Value Assets Cash AR net Inventories (FIFO) Other current assets Plants assets, net $3,000,000 5,500,000 6,000,000 1,500,000 16,000,000 $3.000.000 5,000,000 7,000,000 1,500,000 19,500,000 $1,000,000 2,000,000 3,500,000 500,000 5,000,000 $1,000,000 2,000,000 3,800,000 700,000 7,500,000 TOTAL ASSETS $32,000,000 $36,000,000 $12,000,000 $15,000,000 Equities $5,000,000 4,000,000 $1,700,000 3,100,000 AP $5,000,000 Other liabilities 3,800,000 Common stock ($10 par) 15,000,000 Additional Paid In Capital 3,000,000 Retained eamings 5,200,000 $1,800,000 3,200,000 3,000,000 1,200,000 2,800,000 27,000,000 10,200,000 TOTAL EQUITIES $32.000.000 $36.000.000 $12.000.000 $15.000.000 A. On January 1, 20X4 Pretty Corporation issued 600,000 shares of its common stock for all of Silly's outstanding shares and Silly Corporation is dissolved. The fair value of Pretty Corporation's common stock of January 1, 20X4is $20 per share. Complete she spreadsheet for Pretty Corporation immediately after the business combination. Pretty Book Value Silly Book Value Debits Credits Total Assets Cash AR net Inventories (FIFO) Other current assets Plants assets, net Investment in Silly $3,000,000 5,500,000 6,000,000 1,500,000 16,000,000 12,000,000 $1,000,000 2,000,000 3,500,000 500,000 5,000,000 TOTAL ASSETS $44.000.000 $12.000.000 Equities $5,000,000 Other liabilities 3,800,000 Common stock ($10 par) 21,000,000 Additional Paid In Capital 9,000,000 Retained eamings 5,200,000 $1,800,000 3,200,000 3,000,000 1,200,000 2.800.000 TOTAL EQUITIES $44.000.000 $12,000,000 B. On January 1, 20X4 Pretty Corporation issued 600,000 shares of its common stock for all of Silly's outstanding shares and Silly Corporation is dissolved. The fair value of Pretty Corporation's common stock of January 1, 20X4is $16 per share. Complete she spreadsheet for Pretty Corporation immediately after the business combination. Pretty Book Value Silly Book Value Debits Credits Total Assets Cash AR net Inventories (FIFO) Other current assets Plants assets, net Investment in Silly $3,000,000 5,500,000 6,000,000 1,500,000 16,000,000 9,600,000 $1,000,000 2,000,000 3,500,000 500,000 5,000,000 TOTAL ASSETS $41,600,000 $12,000,000 Equities $5,000,000 Other liabilities 3,800,000 Common stock ($10 par) 21,000,000 Additional Paid In Capital 6,600,000 Retained eamings 5,200,000 $1,800,000 3,200,000 3,000,000 1,200,000 2,800,000 TOTAL EQUITIES $41,600,000 $12,000,000 The balance sheets and fair values of Pretty Corporation and Silly Corporation at 12/31/X3 are as follows: Book Value Fair Value Book Value Fair Value Assets Cash AR net Inventories (FIFO) Other current assets Plants assets, net $3,000,000 5,500,000 6,000,000 1,500,000 16,000,000 $3.000.000 5,000,000 7,000,000 1,500,000 19,500,000 $1,000,000 2,000,000 3,500,000 500,000 5,000,000 $1,000,000 2,000,000 3,800,000 700,000 7,500,000 TOTAL ASSETS $32,000,000 $36,000,000 $12,000,000 $15,000,000 Equities $5,000,000 4,000,000 $1,700,000 3,100,000 AP $5,000,000 Other liabilities 3,800,000 Common stock ($10 par) 15,000,000 Additional Paid In Capital 3,000,000 Retained eamings 5,200,000 $1,800,000 3,200,000 3,000,000 1,200,000 2,800,000 27,000,000 10,200,000 TOTAL EQUITIES $32.000.000 $36.000.000 $12.000.000 $15.000.000 A. On January 1, 20X4 Pretty Corporation issued 600,000 shares of its common stock for all of Silly's outstanding shares and Silly Corporation is dissolved. The fair value of Pretty Corporation's common stock of January 1, 20X4is $20 per share. Complete she spreadsheet for Pretty Corporation immediately after the business combination. Pretty Book Value Silly Book Value Debits Credits Total Assets Cash AR net Inventories (FIFO) Other current assets Plants assets, net Investment in Silly $3,000,000 5,500,000 6,000,000 1,500,000 16,000,000 12,000,000 $1,000,000 2,000,000 3,500,000 500,000 5,000,000 TOTAL ASSETS $44.000.000 $12.000.000 Equities $5,000,000 Other liabilities 3,800,000 Common stock ($10 par) 21,000,000 Additional Paid In Capital 9,000,000 Retained eamings 5,200,000 $1,800,000 3,200,000 3,000,000 1,200,000 2.800.000 TOTAL EQUITIES $44.000.000 $12,000,000 B. On January 1, 20X4 Pretty Corporation issued 600,000 shares of its common stock for all of Silly's outstanding shares and Silly Corporation is dissolved. The fair value of Pretty Corporation's common stock of January 1, 20X4is $16 per share. Complete she spreadsheet for Pretty Corporation immediately after the business combination. Pretty Book Value Silly Book Value Debits Credits Total Assets Cash AR net Inventories (FIFO) Other current assets Plants assets, net Investment in Silly $3,000,000 5,500,000 6,000,000 1,500,000 16,000,000 9,600,000 $1,000,000 2,000,000 3,500,000 500,000 5,000,000 TOTAL ASSETS $41,600,000 $12,000,000 Equities $5,000,000 Other liabilities 3,800,000 Common stock ($10 par) 21,000,000 Additional Paid In Capital 6,600,000 Retained eamings 5,200,000 $1,800,000 3,200,000 3,000,000 1,200,000 2,800,000 TOTAL EQUITIES $41,600,000 $12,000,000