Question
The following are selected accounts and balances for Mergaronite Company and Hill, Inc., as of December 31, 2021. Several of Mergaronite's accounts have been
The following are selected accounts and balances for Mergaronite Company and Hill, Inc., as of December 31, 2021. Several of Mergaronite's accounts have been omitted. Credit balances are indicated by parentheses. Dividends were declared and paid in the same period. Revenues Cost of goods sold Depreciation expense Investment income Retained earnings, 1/1/21 Dividends declared Current assets Land Buildings (net) Equipment (net) Liabilities Common stock Additional paid-in capital Mergaronite Hill $ (620,000) $ (260,000) 276,000 102,000 106,000 46,000 NA (912,000) (586,000) 124,000 44,000 210,000 686,000 308,000 98,000 488,000 130,000 196,000 252,000 (406,000) (302,000) (282,000) (58,000) (42,000) (924,000) Assume that Mergaronite acquired Hill on January 1, 2017, by issuing 6,200 shares of common stock having a par value of $10 per share but a fair value of $100 each. On January 1, 2017, Hill's land was undervalued by $18,200, its buildings were overvalued by $28,000, and equipment was undervalued by $58,800. The buildings had a 10-year remaining life; the equipment had a 5-year remaining life. A customer list with an appraised value of $108,000 was developed internally by Hill and was estimated to have a 20- year remaining useful life.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started