Homework Help is Here – Start Your Trial Now!
Business
Accounting
Purchase at More than Book Value Ramrod Manufacturing acquired all the assets and liabilities of Stafford Industries on January 1 20X2, in exchange for 4,000 shares of Ramrod's $20 par value common stock. Balance sheet data for both companies just before the merger are given as follows: Stafford Industries Ramrod Manufacturing Fair Value Book Value Fair Value Balance Sheet Items Book Value $ 70,000 100,000 200,000 50,000 600,000 (250,000) $770,000 $ 70,000 100,000 375,000 80,000 540,000 $ 30,000 60,000 100,000 40,000 400,000 (150,000) $ 480,000 $ 30,000 60,000 160,000 30,000 350,000 Cash Accounts Receivable Inventory Land Buildings & Equipment Less: Accumulated Depreciation Total Assets $1,165,000 $630,000 Accounts Payable Bonds Payable $ 50,000 300,000 $ 10,000 150,000 $ 10,000 145,000 2$ 50,000 310,000 Common Stock: $20 par value $5 par value Additional Paid-In Capital Retained Earnings 200,000 40,000 180,000 $770,000 100,000 20,000 200,000 $ 480,000 Total Liabilities & Equities Ramrod shares were selling for $150 on the date of acquisition. Required Prepare the following: a. Journal entries to record the acquisition on Ramrod's books. b. A balance sheet for the combined enterprise immediately following the business combination.

Purchase at More than Book Value Ramrod Manufacturing acquired all the assets and liabilities of Stafford Industries on January 1 20X2, in exchange for 4,000 shares of Ramrod's $20 par value common stock. Balance sheet data for both companies just before the merger are given as follows: Stafford Industries Ramrod Manufacturing Fair Value Book Value Fair Value Balance Sheet Items Book Value $ 70,000 100,000 200,000 50,000 600,000 (250,000) $770,000 $ 70,000 100,000 375,000 80,000 540,000 $ 30,000 60,000 100,000 40,000 400,000 (150,000) $ 480,000 $ 30,000 60,000 160,000 30,000 350,000 Cash Accounts Receivable Inventory Land Buildings & Equipment Less: Accumulated Depreciation Total Assets $1,165,000 $630,000 Accounts Payable Bonds Payable $ 50,000 300,000 $ 10,000 150,000 $ 10,000 145,000 2$ 50,000 310,000 Common Stock: $20 par value $5 par value Additional Paid-In Capital Retained Earnings 200,000 40,000 180,000 $770,000 100,000 20,000 200,000 $ 480,000 Total Liabilities & Equities Ramrod shares were selling for $150 on the date of acquisition. Required Prepare the following: a. Journal entries to record the acquisition on Ramrod's books. b. A balance sheet for the combined enterprise immediately following the business combination.

Financial Reporting, Financial Statement Analysis and Valuation
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter8: Investing Activities
Section: Chapter Questions
Problem 23PC
See similar textbooks
icon
Related questions
Question
Purchase at More than Book Value Ramrod Manufacturing acquired all the assets and liabilities of Stafford Industries on January1 20X2, in exchange for 4,000 shares of Ramrod's $20 par value common stock. Balance sheet data for both companies just before the merger are given as follows: Stafford Industries Ramrod Manufacturing Book Value Fair Value Fair Value Balance Sheet Items Book Value $ 30,000 60,000 160,000 30,000 350,000 $ 30,000 60,000 100,000 40,000 400,000 (150,000) $ 480,000 $ 10,000 150,000 $ 70,000 100,000 200,000 50,000 600,000 (250,000) $770,000 70,000 100,000 375,000 80,000 540,000 Cash Accounts Receivable Inventory Land Buildings & Equipment Less: Accumulated Depreciation } $630,000 $ 10,000 145,000 Total Assets $1,165,000 Accounts Payable Bonds Payable Common Stock: $ 50,000 300,000 $ 50,000 310,000 200,000 $20 par value $5 par value Additional Paid-In Capital Retained Earnings 100,000 20,000 40,000 180,000 $770,000 200,000 $ 480,000 Total Liabilities & Equities %$4 Ramrod shares were selling for $150 on date of acquisition. Required Prepare the following: a. Journal entries to record the acquisition on Ramrod's books. b. A balance sheet for the combined enterprise immediately following the business combination.
Transcribed Image Text:Purchase at More than Book Value Ramrod Manufacturing acquired all the assets and liabilities of Stafford Industries on January1 20X2, in exchange for 4,000 shares of Ramrod's $20 par value common stock. Balance sheet data for both companies just before the merger are given as follows: Stafford Industries Ramrod Manufacturing Book Value Fair Value Fair Value Balance Sheet Items Book Value $ 30,000 60,000 160,000 30,000 350,000 $ 30,000 60,000 100,000 40,000 400,000 (150,000) $ 480,000 $ 10,000 150,000 $ 70,000 100,000 200,000 50,000 600,000 (250,000) $770,000 70,000 100,000 375,000 80,000 540,000 Cash Accounts Receivable Inventory Land Buildings & Equipment Less: Accumulated Depreciation } $630,000 $ 10,000 145,000 Total Assets $1,165,000 Accounts Payable Bonds Payable Common Stock: $ 50,000 300,000 $ 50,000 310,000 200,000 $20 par value $5 par value Additional Paid-In Capital Retained Earnings 100,000 20,000 40,000 180,000 $770,000 200,000 $ 480,000 Total Liabilities & Equities %$4 Ramrod shares were selling for $150 on date of acquisition. Required Prepare the following: a. Journal entries to record the acquisition on Ramrod's books. b. A balance sheet for the combined enterprise immediately following the business combination.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Mergers, Acquisitions and Takeovers
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
  • SEE MORE QUESTIONS
Recommended textbooks for you
Financial Reporting, Financial Statement Analysis…
Financial Reporting, Financial Statement Analysis…
Finance
ISBN:
9781285190907
Author:
James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS