Using the data given in Problem assume that Raabe Company exchanged 14,000 of its $40 fair value ($1 par value) shares for 16,000 of the outstanding shares of Dalke Company.

In Problem, July 1, 2016, Raabe Company exchanged 18,000 of its $40 fair value ($1 par value) shares for all the outstanding shares of Dalke Company. Raabe paid acquisition costs of $40,000. The two companies had the following balance sheets on July 1, 2016:

The following fair values applied to Dalke’s assets:
Other current assets. . . . . . . . . . . $ 70,000
Inventory . . . . . . . . . . . . . . . . . . . 80,000
Land. . . . . . . . . . . . . . . . . . . . . . . 90,000
Building. . . . . . . . . . . . . . . . . . . . 150,000
Equipment . . . . . . . . . . . . . . . . . . 75,000
Required
1. Record the investment in Dalke Company and any other purchase-related entry.
2. Prepare the value analysis schedule and the determination and distribution of excess schedule.
3. Prepare a consolidated balance sheet for July 1, 2016, immediately subsequent to the purchase.

Transcribed Image Text:

Assets Raabe Dalke $50,000 120,000 100,000 300,000 430,000 $1,000,000 70,000 60,000 40,000 120,000 110,000 $400,000 Other current assets... Building (ne Equipment (net Total assels. Liabilities and Equity 60,000 20,000 180,000 140,000 $400,000 Current liabilities $180,000 40,000 360,000 420,000 $1,000,000 Paid-in capital in excess of par Retained earnings Tolal liabilities and equity