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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Purchase method

Transcribed Image Text:Prepare journal entries & stockholders' equity section
The stockholders’ equities of Riyadh Corporation and Jeddah Corporation at January 1 were as
follows:
Riyadh
Jeddah
Capital stock, S10 par
3,000,000
1,600,000
Other paid-in capital
400,000
800,000
Retained earnings
1,200,000
600,000
Stockholders' equity
4,600,000
3,000,000
Additional Information:
1- On January 2, Riyadh issued 300,000 of its shares with a market value of $20 per share for
all of Jeddah's shares, and Jeddah was dissolved.
2- On January 2, Riyadh paid S$10,000 to register and issue the shares.
3- On January 2, Riyadh paid $20,000 for other direct costs of combination.
Required:
1- Prepare the journal entries to record the acquisition
2 - Prepare the stockholders’ equity section of Riyadh Corporation's balance sheet immediately
after the acquisition on January 2.
Expert Solution
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