Pab Corporation decided to establish Sollon Company as a wholly owned subsidiary by transferring some of its existing assets andliabilities to the new entity. In exchange, Sollon issued Pab 34,000 shares of $7 par value common stock. The following information isprovided on the assets and accounts payable transferred:CashInventoryLandBuildingsEquipmentAccounts PayableRequired ARequired:a. Prepare the journal entry that Pab recorded for the transfer of assets and accounts payable to Sollonb. Prepare the journal entry that Sollon recorded for the receipt of assets and accounts payable from Pab.Complete this question by entering your answers in the tabs below.Required BView transaction listCost$ 38,00089,00061,000174,00099,00045,000APrepare the journal entry that Pab recorded for the transfer of assets and accounts payable to Sollon.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.Journal entry worksheetBook Value$ 38,00089,00061,000136,00070,00045,000Event1Note: Enter debits before credits.Record the transfer of assets and accounts payable to Sollon.Record entryFair Value$ 38,00089,00091,000248,000108,00045,000General JournalClear entryDebitCreditView general journal

Journal entries for Pab Corporation regarding the transfer of assets and the corresponding accounts…

Pab Corporation decided to establish Sollon Company as a wholly owned subsidiary by transferring some of its existing assets and liabilities to the new entity. In exchange, Sollon issued Pab 34,000 shares of $7 par value common stock. The following information is provided on the assets and accounts payable transferred: Cash Inventory. Land Buildings. Equipment Accounts Payable Cost $ 38,000 89,000 61,000 174,000 99,000 45,000 Book Value $ 38,000 89,000 61,000 136,000 70,000 45,000 Fair Value $ 38,000 89,000 91,000 248,000 108,000 45,000 Required: a. Prepare the journal entry that Pab recorded for the transfer of assets and accounts payable to Sollon b. Prepare the journal entry that Sollon recorded for the receipt of assets and accounts payable from Pab.

Pab Corporation decided to establish Sollon Company as a wholly owned subsidiary by transferring some of its existing assets and liabilities to the new entity. In exchange, Sollon issued Pab 34,000 shares of $7 par value common stock. The following information is provided on the assets and accounts payable transferred: Cash Inventory. Land Buildings. Equipment Accounts Payable Cost $ 38,000 89,000 61,000 174,000 99,000 45,000 Book Value $ 38,000 89,000 61,000 136,000 70,000 45,000 Fair Value $ 38,000 89,000 91,000 248,000 108,000 45,000 Required: a. Prepare the journal entry that Pab recorded for the transfer of assets and accounts payable to Sollon b. Prepare the journal entry that Sollon recorded for the receipt of assets and accounts payable from Pab.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Pab Corporation decided to establish Sollon Company as a wholly owned subsidiary by transferring…

A: Journal entries form a part of the accounting system of bookkeeping. It includes identification of…

Q: On January 1, 2024, Windsor Company purchased 8,896 shares of Sheridan Company's common stock for…

A: Consolidation is an activity in which financial statements of a parent and its subsidiary should be…

Q: The P Ltd acquires all issued capital of the S Ltd for a consideration of $1,000,000 cash and…

Q: What amount should be recorded as goodwill on the date of the purchase?

A: Goodwill on the date of acquisition = Purchase consideration - Fair value of assets acquired.

Q: On January 1, 20X0, Pepper Corporation issued 10,000 of its $15 par value shares to acquire 45…

A: Journal Entry is the primary step to record the transaction in the books of accounts. The amount…

Q: Mainline Produce Corporation acquired all the outstanding common stock of Iceberg Lettuce…

A: Intangible Assets: Intangible assets are the long-term assets having no physical existence. However,…

Q: Question 1 .Panther Corporation decided to establish Snake Company as a wholly owned subsidiary by…

A: A journal is a detailed account that records all the financial transactions of a business, to be…

Q: On January 1, 20X2, Plend Corporation acquired all of Stork Corporation's assets and liabilities by…

A: The question is based on the concept of Financial Accounting. When the net asset assets are acquired…

Q: Phelps Corporation owns all of the common stock of Stern Company. Each company maintains its own…

A: Lets understand the basics. When one company holds 51% or more shares of another entity then first…

Q: On January 1, 2XX1, Bargain Inc. acquired 100% of Wind Corporation for $9,750,000 cash. On that…

A: Consolidation is an activity in which financial statements of a parent and its subsidiary should be…

Q: Pamrod Manufacturing acquired all the assets and liabilities of Stafford Industries on January 1,…

A: Merger of Companies: - merger of Companies refers to the combination of two or more companies into…

Q: Pitan Company pays $2,000,000 in cash to acquire Sictory Company’s assets and liabilities (a…

A: Merger and acquisition are the types of business transactions wherein one entity merges with another…

Q: Polaris Company acquires all of the stock of SSC, Inc. for $100 million in cash. At the date of…

A: Goodwill is the excess amount paid over the fair value (FV) of the net assets of the entity. It is…

Q: King's Road recently acquired all of Oxford Corporation's stock and is now consolidating the…

A: When Profit calculated as per the Tax basis is lower than the profit calculated as per the…

Q: On February 1, 20x21, Paco Corp. acquired outstanding ordinary shares of School Inc. for cash. The…

A: Control premium: Control premium refers to a sum that the buyer will pay over the honest assessment…

Q: The P Ltd acquires all issued capital of the S Ltd for a consideration of $1,000,000 cash and…

A: Goodwill-: Goodwill is a non-touchable asset that is correlated with the investment of one firm by…

Q: Regular journal entry to record the business combination transaction.

A: Here FAR is the acquiror and SAR is the Acquiree. During the calculation of Net assets , Market…

Question

Pab Corporation decided to establish Sollon Company as a wholly owned subsidiary by transferring some of its existing assets and
liabilities to the new entity. In exchange, Sollon issued Pab 34,000 shares of $7 par value common stock. The following information is
provided on the assets and accounts payable transferred:
Cash
Inventory
Land
Buildings
Equipment
Accounts Payable
Required A
Required:
a. Prepare the journal entry that Pab recorded for the transfer of assets and accounts payable to Sollon
b. Prepare the journal entry that Sollon recorded for the receipt of assets and accounts payable from Pab.
Complete this question by entering your answers in the tabs below.
Required B
View transaction list
Cost
$ 38,000
89,000
61,000
174,000
99,000
45,000
A
Prepare the journal entry that Pab recorded for the transfer of assets and accounts payable to Sollon.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Journal entry worksheet
Book Value
$ 38,000
89,000
61,000
136,000
70,000
45,000
Event
1
Note: Enter debits before credits.
Record the transfer of assets and accounts payable to Sollon.
Record entry
Fair Value
$ 38,000
89,000
91,000
248,000
108,000
45,000
General Journal
Clear entry
Debit
Credit
View general journal

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction

VIEW

Step 2: a) Journal entry that pab recorded

VIEW

Step 3: b) Journal entry that sollon recorded

VIEW

Solution

VIEW

Step by step

Solved in 4 steps with 4 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

The P Ltd acquires all issued capital of the S Ltd for a consideration of $1,000,000 cash and 800,000 shares eachvalued at $1.50. The summary statement of the financial position of the subsidiary company immediatelyfollowing the acquisition is:Fair value of assets acquired $2,640,000Fair value of liabilities acquired $720,000Total shareholders’ equity of the subsidiary company $800,000Retained earnings of the subsidiary company $1,120,000Required:(d) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition if the purchaseconsideration paid was $1,000,000 cash and 400,000 shares each valued at $1.50
The P Ltd acquires all issued capital of the S Ltd for a consideration of $1,000,000 cash and 800,000 shares each valued at $1.50. The summary statement of the financial position of the subsidiary company immediately following the acquisition is: Fair value of assets acquired. $2,640,000Fair value of liabilities acquired. $720,000Total shareholders’ equity of the subsidiary company $800,000Retained earnings of the subsidiary company $1,120,000 (d) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition if the purchase consideration paid was $1,000,000 cash and 400,000 shares each valued at $1.50
PR Company pays $25,000 in cash and issues no-par stock with a fair value of $40,000 to acquire all of SX Corporation's net assets. SX's balance sheet at the date of acquisition is as follows: Current assets Property, plant & equipment, net Identifiable intangible assets Total assets Current liabilities Long-term debt Capital stock Retained earning SX Corporation Book value Fair value $5,000 $8,000 13,000 4,000 $22,000 Accumulated other comprehensive income Treasury stock Total abilities & equity $4,600 14,500 4,000 5.500 (1,000) (R600) $22,000 9,000 13,000 $5,600 13,800 PR's consultants find these items that are not reported on SXS balance sheet
Proton Company acquired all of the outstanding ordinary shares of an acquiree paying P7,400,000 cash. The carrying amount and fair value of the assets and liabilities of the acquiree were: Carrying Amount Fair Value P P Accounts receivable 1,080,000 975,000 Inventory 1,620,000 2,400,000 Property and equipment 5,400,000 6,975,000 Accounts payable (1,800,000) (1,800,000) Bonds payable (2,700,000) (2,475,000) Net assets acquired P3,600,000 P6,075,000 What amount of goodwill should be reported at year-end? O P3,800,000 PO O P1,325,000 P2,300,000
Pab Corporation decided to establish Sollon Company as a wholly owned subsidiary by transferring some of its existing assets and liabilities to the new entity. In exchange, Sollon issued Pab 35,000 shares of $7 par value common stock. The following information is provided on the assets and accounts payable transferred: Cost Book Value Fair Value Cash $ 32,000 $ 32,000 $ 32,000 Inventory 83,000 83,000 83,000 Land 69,000 69,000 99,000 Buildings 188,000 147,000 249,000 Equipment 95,000 74,000 123,000 Accounts Payable 58,000 58,000 58,000 Required: Prepare the journal entry that Pab recorded for the transfer of assets and accounts payable to Sollon Prepare the journal entry that Sollon recorded for the receipt of assets and accounts payable from Pab.
8. Kopi Company acquired all of the outstanding ordinary shares of an acquiree paying P9,000,000 cash. The carrying amount and fair value of the assets and liabilities of the acquiree were: Carrying amount Fair Value Accounts receivable P 1,500,000 Inventory 4,800,000 Land 7,500,000 Property and Equipment 2,500,000 Accounts payable 2,500,000 Bonds Payable 1,900,000 P 1,200,000 3,000,000 5,000,000 2,000,000 2,500,000 1,500,000 What amount should be recognized as goodwill or negative goodwill? a. P 1,900,000 b. P-1,900,000 c. P 2,900,000 d. P-2,900,000
Do not give solution in image
The P Ltd acquires all issued capital of the S Ltd for a consideration of $1,000,000 cash and 800,000 shares each valued at $1.50. The summary statement of the financial position of the subsidiary company immediatelyfollowing the acquisition is:Fair value of assets acquired $2,640,000Fair value of liabilities acquired $720,000Total shareholders’ equity of the subsidiary company $800,000Retained earnings of the subsidiary company $1,120,000Required:(a) Pass the necessary journal entry to record the acquisition(b) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition(c) Pass the necessary consolidation entry to eliminate the subsidiary by the parent company(d) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition if the purchase consideration paid was $1,000,000 cash and 400,000 shares each valued at $1.50
The PTCL Ltd acquires all issued capital of the S Ltd for a consideration of $1,000,000 cash and 800,000 shares each valued at $1.50. The summary statement of the financial position of the subsidiary company immediately following the acquisition is: Fair value of assets acquired $2,640,000 Fair value of liabilities acquired $720,000 Total shareholders’ equity of the subsidiary company $800,000 Retained earnings of the subsidiary company $1,120,000 Required: (a) Pass the necessary journal entry to record the acquisition (b) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition (c) Pass the necessary consolidation entry to eliminate the subsidiary by the parent company (d) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition if the purchase consideration paid was $1,000,000 cash and 400,000 shares each valued at $1.50.Thanks
could you answer part B please? Pagle Corporation established a subsidiary to enter into a new line of business considered to be substantially more risky than Pagle's current business. Pagle transferred the following assets and accounts payable to Sand Corporation in exchange for 5,000 shares of $10 par value stock of Sand: Cash Accounts Receivable Inventory Land Buildings and Equipment Accounts Payable Cost $ 30,000 45,000 60,000 20,000 300,000 10,000 Required B Book Value $ 30,000 40,000 60,000 20,000 260,000 10,000 Required: a. Prepare the journal entry that Pagle recorded for the transfer of assets and accounts payable to Sand. b. Prepare the journal entry that Sand recorded for receipt of the assets and accounts payable from Pagle. Complete this question by entering your answers in the tabs below. Required A Prepare the journal entry that Sand recorded for receipt of the assets and accounts payable from Pagle. Note: If no entry is required for a transaction/event, select "No…