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Williams Corporation pays cash of $250,000 to acquire the net assets of Frank Company on December 31, 20XX. The balance sheets of Williams Corporation and
Williams Corporation pays cash of $250,000 to acquire the net assets of Frank Company on December 31, 20XX. The balance sheets of Williams Corporation and Frank Company, as well as the fair value information for Frank Company, is provided on attached
Prepare the journal entry required by Williams Corporation if it acquires all of Frank Companys common stock (instead of Frank Companys net assets) for $250,000.
Williams Corporation Balance Sheet-Book Value December 31, 20XX Cash Accounts Receivable Inventory Patents Buildings and Equipment Less: Accumulated Depreciation $ 200,000 $ 175,000 $ 220,000 $ 140,000 $ 530,000 $ (190,000) Accounts Payable Notes Payable Common Stock Additional Paid-In Capital Retained Earnings $ $ $ $ $ 220,000 270,000 200,000 160,000 225,000 $ 1,075,000 $ 1,075,000 Frank Company Balance Sheet-Book Value December 31, 20XX Cash Accounts Receivable Inventory Patents Buildings and Equipment Less: Accumulated Depreciation $ 8,000 $ 20,000 $ 20,000 $ 10,000 $ 100,000 $ (50,000) Accounts Payable Notes Payable Common Stock Additional Paid-In Capital Retained Earnings $ $ $ $ $ 14,000 20,000 20,000 16,000 38,000 $ 108,000 $ 108,000 Frank Company Balance Sheet-Fair Value December 31, 20XX $ $ 14,000 20,000 Cash Accounts Receivable Inventory Patents Buildings and Equipment $ $ $ $ $ 8,000 20,000 40,000 20,000 120,000 Accounts Payable Notes Payable Common Stock Additional Paid-In Capital Retained EarningsStep by Step Solution
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