Fundamentals of Advanced Accounting
Fundamentals of Advanced Accounting
6th Edition
ISBN: 9780077862237
Author: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
Publisher: McGraw-Hill Education
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Chapter 2, Problem 33AP

a.

To determine

Prepare Company A’s journal entries to record the Company B’s acquisition assuming its initial cash payment to the former owners was $610,000 and $425,000.

b.

To determine

Prepare Company Z’s journal entries to record the Company S’s acquisition assuming its initial cash payment to the former owners was  $610,000 and $425,000.

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Pam Company acquires the net assets of Jam Company for an agreed-upon price of $900,000 on July 1, 2015. The value is tentatively assigned as follows:Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 100,000Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000 (5-year life)Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500,000 (20-year life)Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (150,000)Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000Values are subject to change during the measurement period. Depreciation is taken to the nearest month. The measurement period expires on July 1, 2016, at which time the fair values of the equipment and building as of the acquisition date…
On 1/1/2020, X Company acquired 100% of Y Company's Net assets for $150,000 cash. The Book value of Y's Net assets was equal to the fair value of Y Company's net assets at the date of acquisition except for Land (included in fixed assets) its market value was less than the book value by $1,000, the balance sheet data at 1/1/2020, are as follows: item X co Y co cash 404,000 150,000 Fixed assets 100,000 66,000 Liabilities 144,000 72,000 Common stock 120,000 60,000 Retained earning 240,000 84,000 required: if the acquisition are merger record the journal entries and prepare x balance sheet after the merger
Woolco, Inc., purchased all the outstanding stock of Paint, Inc., for $980,000. Woolco also paid $10,000 in direct acquisition costs. Just before the investment, the two companies had the following balance sheets: Assets                                             Woolco, Inc.            Paint, Inc. Accounts receivable . . . . . . . . . . . . . . . $ 900,000                   $ 500,000 Inventory . . . . . . . . . . . . . . . . . . . . . . . .      600,000                      200,000 Depreciable fixed assets (net) . . . . . . . . 1,500,000                   600,000 Total assets. . . . . . . . . . . . . . . . . . . . .         $3,000,000             $1,300,000 Liabilities and Equity Current liabilities . . . . . . . . . . . . . . . . . .      $ 950,000              $ 400,000 Bonds payable . . . . . . . . . . . . . . . . . . .           500,000                 200,000 Common stock ($10 par). . . . . . . . . . . .        400,000                300,000 Paid-in capital in excess of par . .…
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