The following are summarized statements of financial position of three companies as at December 31, Year 3:

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The following are summarized statements of financial position of three companies as at December 31, Year 3:
The following are summarized statements of financial position of three

The fair values of the identifiable assets and liabilities of the three companies as at December 31, Year 3, were as follows:

The following are summarized statements of financial position of three

On January 2, Year 4, Company X will purchase the assets and assume the liabilities of Company Y and Company Z. It has been agreed that Company X will issue common shares to each of the two companies as payment for their net assets as follows:
To Company Y€”13,500 shares
To Company Z€”12,000 shares
The shares of Company X traded at $15 on December 31, Year 3.
Company X will incur the following costs associated with this acquisition:
Costs of registering and issuing shares ......... $12,000
Other professional fees associated with the takeover ... 30,000
$42,000
Company Y and Company Z will be wound up after the sale.
Required:
(a) Prepare a summarized pro forma statement of financial position of Company X as at January 2, Year 4, after the purchase of net assets from Company Y and Company Z.
(b) Prepare the pro forma statements of financial position of Company Y and Company Z as at January 2, Year 4, after the sale of net assets to Company X and prior to being wound up.

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Modern Advanced Accounting In Canada

ISBN: 9781259066481

7th Edition

Authors: Hilton Murray, Herauf Darrell

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