Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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Chapter 2, Problem 23P
The following book and fair values were available for Westmont Company as of March 1.
| Book Value | Fair Value | |
| Inventory | $ 630,000 | $ 600,000 |
| Land | 750,000 | 990,000 |
| Buildings | 1,700,000 | 2,000,000 |
| Customer relationships | –0– | 800,000 |
| Accounts payable | (80,000) | (80,000) |
| Common stock | (2,000,000) | |
| Additional paid-in capital | (500,000) | |
| (360,000) | ||
| Revenues | (420,000) | |
| Expenses | 280,000 |
Arturo Company pays $4,000,000 cash and issues 20,000 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmont’s common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $25,000 and Arturo pays $42,000 for legal fees to complete the transaction. Prepare Arturo’s
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The following book and fair values were available for Westmont Company as of March 1.
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$
203,750
Land
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Buildings
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Customer relationships
0
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Arturo Company pays $4,160,000 cash and issues 22,200 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmont’s common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $31,900 and Arturo pays $51,200 for legal fees to complete the transaction.
Prepare Arturo’s journal entries to record its acquisition of Westmont.
The following book and fair values were available for Westmont Company as of March 1.
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$
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$
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1,034,250
Buildings
2,150,000
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Customer relationships
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Accounts payable
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Common stock
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Arturo Company pays $3,400,000 cash and issues 25,400 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmont’s common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $25,300 and Arturo pays $51,100 for legal fees to complete the transaction.
Prepare Arturo’s journal entry to record its acquisition of Westmont. (If no entry is required for a transaction/event, select "No journal entry…
The following book and fair values were available for Westmont Company as of March 1.
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$
494,000
$
449,500
Land
763,500
1,060,500
Buildings
1,975,000
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Customer relationships
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859,500
Accounts payable
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Common stock
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Additional paid-in capital
(500,000
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Retained earnings, 1/1
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Arturo Company pays $4,060,000 cash and issues 29,600 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmont’s common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $31,200 and Arturo pays $49,000 for legal fees to complete the transaction.
Prepare Arturo’s journal entries to record its acquisition of Westmont. (If no entry is required for a transaction/event, select "No journal entry…
Chapter 2 Solutions
Advanced Accounting
Ch. 2 - Prob. 1QCh. 2 - Describe the concept of a synergy. What are some...Ch. 2 - Prob. 3QCh. 2 - What does the term consolidated financial...Ch. 2 - Within the consolidation process, what is the...Ch. 2 - Prob. 6QCh. 2 - Prob. 7QCh. 2 - Prob. 8QCh. 2 - Prob. 9QCh. 2 - Prob. 10Q
Ch. 2 - Prob. 11QCh. 2 - Prob. 12QCh. 2 - Which of the following does not represent a...Ch. 2 - Prob. 2PCh. 2 - Prob. 3PCh. 2 - Prob. 4PCh. 2 - Prob. 5PCh. 2 - Prob. 6PCh. 2 - Prob. 7PCh. 2 - When does gain recognition accompany a business...Ch. 2 - Prob. 9PCh. 2 - Prob. 10PCh. 2 - Prob. 11PCh. 2 - On June 1, Cline Co. paid 800,000 cash for all of...Ch. 2 - On May 1, Donovan Company reported the following...Ch. 2 - Prob. 14PCh. 2 - Prob. 15PCh. 2 - Prob. 16PCh. 2 - Prob. 17PCh. 2 - On its acquisition-date consolidated balance...Ch. 2 - On its acquisition-date consolidated balance...Ch. 2 - Prob. 20PCh. 2 - Prob. 21PCh. 2 - Prob. 22PCh. 2 - The following book and fair values were available...Ch. 2 - Prob. 24PCh. 2 - Prob. 25PCh. 2 - Prob. 26PCh. 2 - Prob. 27PCh. 2 - Prob. 28PCh. 2 - SafeData Corporation has the following account...Ch. 2 - Prob. 34PCh. 2 - Prob. 35PCh. 2 - Prob. 39APBCh. 2 - Prob. 40APB
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