Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 1, Problem 1.11E
Balances Reported Following Combination
Palm Corporation and Staple Company have announced terms of an exchange agreement underwhich Palm will issue 8,000 shares of its $10 par value common stock to acquire all of Staple Company’s assets. Palm shares currently are trading at $50, and Staple $5 par value shares are tradingat $18 each. Historical Cost and fair value
Required
What amount will be reported immediately following the business combination for each of the following items in the combined balance sheet?
a. Common Stock.
b. Cash and Receivables.
c. Land.
d. Buildings and Equipment (net).
e.
f. Additional Paid-In Capital.
g.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Octane Company and Bio Company have announced terms of an
Octane Company and Bio Company have announced terms of a
exchange agreement under which Octane will issue 10,000 shares
or Its P5 par value ordinary shares to acquire all of Bio's assets.
Octane's shares are trading at p28. and Bio's P10 par value shares
are trading at P15. Historical cost and fair value statement of
financial position data on January 1, 2008, are as follows:
Octane Company
Book
Bio Company
Fair Value
Book
Value
Fair
Value
10
P 25,000 40,000
30,000 50,000
Value
Cash
P 125,000 P 125,000
75,000
Land
120,000
Buildings and
Equipment (net)
Total Assets
180,000
P 380,000
220,000 120,000 150,000
P 175,000
Ordinary Shares
Share Prenium
P 100,000
P 150,000
bloa 60,000
SvIsunt 20,000 lends
odd 6 be
Retained
earnings
Total
000
170,000
P 380,000
55,000
P 175,000
.000,011
4) Başed on the information provided, what amount will be reported
for Ordinary Share in the combined company's statement of
financial position immediately…
Domestic
Current Attempt in Progress
On April 1, 2024, Sunland Company purchased 35,200 common shares in Ecotown Ltd. for $13 per share. Management has designated
the investment as FVTOCI. On December 5, Ecotown paid dividends of $0.10 per share and its shares were trading at $15 per share on
December 31.
Prepare the required entries to record the purchase, dividends, and year-end adjusting journal entry (if any) for this investment. (Credit
account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the
account titles and enter O for the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit
entries.)
Date
Account Titles
Debit
Credit
Chapter 1 Solutions
Advanced Financial Accounting
Ch. 1 - What types of circumstances would encourage...Ch. 1 - How would the decision to dispose of a segment of...Ch. 1 - Prob. 1.3QCh. 1 - Prob. 1.4QCh. 1 - Prob. 1.5QCh. 1 - Prob. 1.6QCh. 1 - Prob. 1.7QCh. 1 - Prob. 1.8QCh. 1 - Prob. 1.9QCh. 1 - Prob. 1.10Q
Ch. 1 - Prob. 1.11QCh. 1 - Prob. 1.12QCh. 1 - Prob. 1.13QCh. 1 - Prob. 1.14QCh. 1 - Within the measurement period following a business...Ch. 1 - Prob. 1.16QCh. 1 - Prob. 1.1CCh. 1 - Prob. 1.2CCh. 1 - Prob. 1.3CCh. 1 - Prob. 1.4CCh. 1 - Risks Associated with Acquisitions Not all...Ch. 1 - Prob. 1.6CCh. 1 - Prob. 1.1.1ECh. 1 - Prob. 1.1.2ECh. 1 - Prob. 1.1.3ECh. 1 - Multiple-Choice Questions on Complex Organizations...Ch. 1 - Prob. 1.1.5ECh. 1 - Prob. 1.2.1ECh. 1 - Prob. 1.2.2ECh. 1 - Multiple-Choice Questions on Recording Business...Ch. 1 - Prob. 1.2.4ECh. 1 - Multiple-Choice Questions on Recording Business...Ch. 1 - Multiple-Choice Questions on Reported Balances...Ch. 1 - Multiple-Choice Questions on Reported Balances...Ch. 1 - Prob. 1.3.3ECh. 1 - Prob. 1.3.4ECh. 1 - Prob. 1.4.1ECh. 1 - Prob. 1.4.2ECh. 1 - Prob. 1.4.3ECh. 1 - Multiple-Choice Questions Involving Account...Ch. 1 - Prob. 1.4.5ECh. 1 - Prob. 1.5ECh. 1 - Prob. 1.6ECh. 1 - Prob. 1.7ECh. 1 - Prob. 1.8ECh. 1 - Prob. 1.9ECh. 1 - Prob. 1.10ECh. 1 - Balances Reported Following Combination Palm...Ch. 1 - Goodwill Recognition Spur Corporation reported the...Ch. 1 - Acquisition Using Debentures Planter Corporation...Ch. 1 - Bargain Purchase Using the data resented in E1-13,...Ch. 1 - Prob. 1.15ECh. 1 - Prob. 1.16ECh. 1 - Prob. 1.17ECh. 1 - Prob. 1.18ECh. 1 - Prob. 1.19ECh. 1 - Prob. 1.20ECh. 1 - Prob. 1.21ECh. 1 - Prob. 1.22ECh. 1 - Prob. 1.23ECh. 1 - Prob. 1.24PCh. 1 - Prob. 1.25PCh. 1 - Prob. 1.26PCh. 1 - Acquisition in Multiple Steps Peal Corporation...Ch. 1 - Prob. 1.28PCh. 1 - Prob. 1.29PCh. 1 - Prob. 1.30PCh. 1 - Prob. 1.31PCh. 1 - Computation of Account Balances Saspro Division is...Ch. 1 - Prob. 1.33PCh. 1 - Prob. 1.34PCh. 1 - Prob. 1.35PCh. 1 - Business Combination Following are the balance...Ch. 1 - Prob. 1.37PCh. 1 - Prob. 1.38PCh. 1 - Prob. 1.39PCh. 1 - Prob. 1.40P
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
- On April 1, 2024, Sunland Company purchased 44,800 common shares in Ecotown Ltd. for $13 per share. Management has designated the investment as FVTOCI. On December 5, Ecotown paid dividends of $0.10 per share and its shares were trading at $15 per share on December 31. Prepare the required entries to record the purchase, dividends, and year-end adjusting journal entry (if any) for this investment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) Date Account Titles く Debit Creditarrow_forwardOn April 1, 2024, Sandhill Company purchased 46,400 common shares in Ecotown Ltd. for $13 per share. Management has designated the investment as FVTOCI. On December 5, Ecotown paid dividends of $0.10 per share and its shares were trading at $15 per share on December 31. Prepare the required entries to record the purchase, dividends, and year-end adjusting journal entry (if any) for this investment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) Date Save for Later Account Titles Debit Credit Attempts: 0 of 1 used Submit Answerarrow_forwardOn April 1, 2024, Sheridan Company purchased 34,400 common shares in Ecotown Ltd. for $18 per share. Management has designated the investment as FVTOCI. On December 5, Ecotown paid dividends of $0.10 per share and its shares were trading at $20 per share on December 31. Prepare the required entries to record the purchase, dividends, and year-end adjusting journal entry (if any) for this investment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries) Date 10 Account Titles Debit Creditarrow_forward
- The condensed balance sheet as of December 31, 2021 of Rain Corporation and Sun Corporation are: On January 1, 2022, Rain Corp. issued 20,000 shares of its common stock in exchange of all the outstanding stocks of Sun Corp. Rain Corp. common stock has market value of P30 per share. After the combination, investment in Sun Corp. stock in the balance sheet of Rain Corp. is:arrow_forwardPlease answer with detailed working , and please provide answer in text form without imagearrow_forwardPeace Company issued common shares with a par value of $59,000 and a market value of $159,300 in exchange for 30 percent ownership of Symbol Corporation on January 1, 20X2. Symbol reported the following balances on that date: Assets Cash Accounts Receivable Inventory (FIFO basis) Land Buildings & Equipment SYMBOL CORPORATION Balance Sheet January 1, 20X2 Book Value Fair Value $ 57,000 86,000 137,000 $ 57,000 86,000 167,000 59,000 74,000 505,000 328,000 (245,000) 33,000 Less: Accumulated Depreciation Patent Total Assets Liabilities & Equities Accounts Payable Bonds Payable Common Stock Additional Paid-In Capital Retained Earnings Total Liabilities & Equities $ 599,000 $ 745,000 $ 22,000 192,000 137,000 11,000 237,000 $ 599,000 $ 22,000 192,000 The estimated economic life of the patents held by Symbol is 4 years. The buildings and equipment are expected to last 6 more years on average. Symbol paid dividends of $15,000 during 20X2 and reported net income of $87,000 for the year. Required:…arrow_forward
- Answer the following:arrow_forwardFlounder Corp. has the following portfolio of securities acquired for trading purposes and accounted for using the FV-NI model at September 30, 2023, the end of the company's third quarter: Investment Cost Fair Value 47,500 common shares of Yuen Inc. $266,000 $190,000 3,200 preferred shares of Monty Ltd. 121,600 128,000 1,350 common shares of Oakwood Inc. 121,500 120,825 On October 8, 2023, the Yuen shares were sold for $5.60 per share. On November 16, 2023, 3,000 common shares of Patriot Corp. were purchased at $43.80 per share. Flounder pays a 1% commission on purchases and sales of all securities. At the end of the fourth quarter, on December 31, 2023, the fair values of the shares held were as follows: Monty $102,050; Patriot $116,750; and Oakwood $137,025. Flounder prepares financial statements every quarter. (a) Your answer is partially correct. Prepare the journal entries to record the sale, purchase, and adjusting entries related to the portfolio for the fourth quarter of 2023.…arrow_forwardNet Income and Comprehensive Income At the beginning of 2019, JR Companys shareholders equity was as follows: During 2019, the following events and transactions occurred: 1. JR recognized sales revenues of 108,000. It incurred cost of goods sold of 62,000 and operating expenses of 12,000, 2. JR issued 1,000 shares of its 5 par common stock for 14 per share. 3. JR invested 30,000 in available-for-sale securities. At the end of the year, the securities had a fair value of 35,000. 4. JR paid dividends of 6,000. The income tax rate on all items of income is 30%. Required: 1. Prepare a 2019 income statement for JR which includes net income and comprehensive income ignore earnings per share). 2. For 2016 prepare a separate (a) income statement (ignore earnings per share) and (b) statement of comprehensive income.arrow_forward
- please prepare the journal entries Q1. Sold 22,500 Treasury shares at $2 each. Q2. Purchased 10% shareholding in Charlie Limited, a supplier, as a long-term investment. The fair value of the 10% shareholding was $2,900,000 as at 1 March. The purchase consideration included a $2,700,000 note receivable due from Charlie Limited and the related interest receivable balance of $144,000, $140,000 cash and a motor vehicle owned by ITI. The motor vehicle was originally obtained at $120,000. ( for depreciation details, refer to Q1 of additional information.) Q3. A 10% share dividend was declared when the market value per share was $2.1. Q4. Paid cash to acquired 30,000 shares of its own at $2.3 each. ITI intends to keep the shares for several months for management bonus.arrow_forwardP Company issues Php500,000 shares of its own Php10 par common stock for the net assets of S Company in a merger consummated on July 1, 2020. On this date, P stock is quoted at P20 per share. Summary of Balance sheet data for the two companies at July 1, 2020, just before combination, are as follows: P S Current Assets Plant Assets Total Assets 18,000,000 22,000,000 40,000,000 12,000,000 20,000,000 3,000,000 5,000,000 40,000,000 1,500,000 6,500,000 8,000,000 2,000,000 3,000,000 1,000,000 2,000,000 8,000,000 Liabilities Common Stock, P10 par Share Premium Retained Earnings Total Equities What is the total assets after of P after the business combination?arrow_forwardRequired: Give the journal entries to record the foregoing transactions and prepare the equity section of the statement of financial position as of January 31, 2020 under a. memorandum entry method, b.journal entry method The following are the transactions of JEYA Inc. for the month of January 2020. January 5 officially formed the corporation with 5,000,000 authorized share capital at P10 par value. January 6 the incorporators subscribed and paid in full 1,000,000 shares. January 8 issued 500,000 shares to an investors for P15 per share. January 10 received subscription from an investor for 200,000 shares at P20 per share. January 15 issued 5,000 shares for incorporation services rendered by a consultancy firm. The service is worth P100,000. January 20 issued 500,000 shares for P16 per share. January 24 collected the payment for subscription on January 10. January 27 received subscription for 1,000,000 shares at P11 per share receiving 50% advanced payment. January 30 issued 2,000…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Financial instruments products; Author: fi-compass;https://www.youtube.com/watch?v=gvxozM3TUIg;License: Standard Youtube License