On July 1, 20X1, Pushway Corporation issued 100,000 shares of common stock in exchange for all of Stroker Company’s common stock. The Pushway stock issued had a market value of $500,000 on the date of the exchange. Following are the July 1, 20X1, pre-acquisition balance sheets of Pushway and Stroker, plus fair value information for Stroker’s assets and liabilities. Stroker Pushway Book Value Fair Value Assets Current assets $ 300,000 $ 100,000 $ 100,000 Long-term assets 600,000 400,000 470,000 Total assets $ 900,000 $ 500,000 $ 570,000 Liabilities Current liabilities $ 200,000 $ 50,000 $ 50,000 Long-term liabilities 250,000 100,000 120,000 Total liabilities 450,000 150,000 $ 170,000 Stockholders' equity Common stock 300,000 250,000 Retained earnings 150,000 100,000 Total stockholders' equity 450,000 350,000 Total liabilities and equity $ 900,000 $ 500,000 What amount will be shown on the July 1, 20X1, consolidated balance sheet for the following: Total equity

On July 1, 20X1, Pushway Corporation issued 100,000 shares of common stock in exchange for all of Stroker Company’s common stock. The Pushway stock issued had a market value of $500,000 on the date of the exchange. Following are the July 1, 20X1, pre-acquisition balance sheets of Pushway and Stroker, plus fair value information for Stroker’s assets and liabilities. Stroker Pushway Book Value Fair Value Assets Current assets $ 300,000 $ 100,000 $ 100,000 Long-term assets 600,000 400,000 470,000 Total assets $ 900,000 $ 500,000 $ 570,000 Liabilities Current liabilities $ 200,000 $ 50,000 $ 50,000 Long-term liabilities 250,000 100,000 120,000 Total liabilities 450,000 150,000 $ 170,000 Stockholders' equity Common stock 300,000 250,000 Retained earnings 150,000 100,000 Total stockholders' equity 450,000 350,000 Total liabilities and equity $ 900,000 $ 500,000 What amount will be shown on the July 1, 20X1, consolidated balance sheet for the following: Total equity

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter15: Contributed Capital

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Problem 1MC

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On July 1, 20X1, Pushway Corporation issued 100,000 shares of common stock in exchange for all of Stroker Company’s common stock. The Pushway stock issued had a market value of $500,000 on the date of the exchange. Following are the July 1, 20X1, pre-acquisition balance sheets of Pushway and Stroker, plus fair value information for Stroker’s assets and liabilities. Stroker Pushway Book Value Fair Value Assets Current assets $ 300,000 $ 100,000 $ 100,000 Long-term assets 600,000 400,000 470,000 Total assets $ 900,000 $ 500,000 $ 570,000 Liabilities Current liabilities $ 200,000 $ 50,000 $ 50,000 Long-term liabilities 250,000 100,000 120,000 Total liabilities 450,000 150,000 $ 170,000 Stockholders' equity Common stock 300,000 250,000 Retained earnings 150,000 100,000 Total stockholders' equity 450,000 350,000…
On January 1, 20X2, Parent Inc. issued 32,000 shares of its P10 par value common stock for all the outstanding shares of Son Company. The fair value of Parent Inc.'s stock is P25 per share. Parent Inc. pays P50,000 in registering the stocks. Given below are the statements of financial position (SFP) of the companies before the acquisition: Parent Inc. Statement of Financial Position January 1, 20X2 Assets Liabilities and Equity P200,000 Accounts Payable 185,000 Bonds Payable 190,000 Common Stock, P10 par value 300,000 Additional Paid-In Capital (APIC) 740,000 Retained Earnings 420,000 Total Liabilities and Equity Cash P210,000 420,000 400,000 500,000 505,000 P2,035,000 Accounts Receivable Inventory Land Building, net of depreciation Equipment, net of depreciation Total Assets P2,035,000 Son Company Statement of Financial Position January 1, 20X2 Book Value Fair Value Accounts Receivable P55,000 130,000 85,000 320,000 140,000 P730,000 P55,000 150,000 130,000 500,000 300,000 P1,135,000…
On January 1, 20X2, Parent Inc. issued 32,000 shares of its P10 par value common stock for all the outstanding shares of Son Company. The fair value of Parent Inc.'s stock is P25 per share. Parent Inc. pays P50,000 in registering the stocks. Given below are the statements of financial position (SFP) of the companies before the acquisition: Parent Inc. Statement of Financial Position January 1, 20X2 Assets Liabilities and Equity P210,000 420,000 400,000 500,000 505,000 P2,035,000 Cash P200,000 Accounts Payable 185,000 Bonds Payable 190,000 Common Stock, P10 par value 300,000 Additional Paid-In Capital (APIC) 740,000 Retained Earnings 420,000 Total Liabilities and Equity P2,035,000 Accounts Receivable Inventory Land Building, net of depreciation Equipment, net of depreciation Total Assets Son Company Statement of Financial Position January 1, 20X2 Book Value Fair Value P55,000 150,000 130,000 500,000 300,000 P1,135,000 Accounts Receivable Inventory Land P55,000 130,000 85,000 320,000…
On January 1, 2023, Tamarisk Company issued 1,450 of its $20 par value common shares with a fair value of $60 per share in exchange for the 2,000 outstanding common shares of Sheffield Company in a purchase transaction. Registration costs amounted to $2,500, paid in cash. Just prior to the acquisition, the balance sheets of the two companies were as follows: Cash Accounts receivable (net) Inventory Plant and equipment (net) Land Total assets Accounts payable Notes payable Common stock, $20 par value Other contributed capital Retained earnings Total equities Tamarisk Company $83,000 103,000 56,000 95,000 23,500 $360,500 $63,000 89,500 100,000 60,000 48,000 $360,500 Sheffield Company $12,600 18,000 25,000 46,500 22,000 $124,100 $19,500 30,000 40,000 27,500 7,100 $124,100 Any difference between the book value of equity and the value implied by the purchase price relates to goodwill.
Problems 15 through 18 are based on the following information:On July 1, TruData Company issues 10,000 shares of its common stock with a $5 par value and a $40 fair value in exchange for all of Webstat Company’s outstanding voting shares. Webstat’s precombination book and fair values are shown below along with book values for TruData’s accounts.On its acquisition-date consolidated balance sheet, what amount should TruData report as retained earnings as of July 1?a. $130,000b. $210,000c. $260,000d. $510,000
Problems 15 through 18 are based on the following information:On July 1, TruData Company issues 10,000 shares of its common stock with a $5 par value and a $40 fair value in exchange for all of Webstat Company’s outstanding voting shares. Webstat’s precombination book and fair values are shown below along with book values for TruData’s accounts.On its acquisition-date consolidated balance sheet, what amount should TruData report as goodwill?a. –0–b. $15,000c. $35,000d. $100,000
Palm Corporation and Staple Company have announced terms of an exchange agreement under which Palm will issue 8,500 shares of its $15 par value common stock to acquire all of Staple Company’s assets. Palm shares currently are trading at $59, and Staple $10 par value shares are trading at $23 each. Historical cost and fair value balance sheet data on January 1, 20X2, are as follows: Palm Corporation Staple Company Balance Sheet Item Book Value Fair Value Book Value Fair Value Assets Cash & Receivables $ 151,000 $ 151,000 $ 46,000 $ 46,000 Land 110,000 190,000 57,000 83,000 Buildings & Equipment (net) 313,000 411,000 176,000 230,000 Total Assets $ 574,000 $ 752,000 $ 279,000 $ 359,000 Equities Common Stock $ 200,000 $ 81,000 Additional Paid-In Capital 18,000 9,900 Retained Earnings…
Problems 15 through 18 are based on the following information:On July 1, TruData Company issues 10,000 shares of its common stock with a $5 par value and a $40 fair value in exchange for all of Webstat Company’s outstanding voting shares. Webstat’s precombination book and fair values are shown below along with book values for TruData’s accounts.On its acquisition-date consolidated balance sheet, what amount should TruData report as patented technology (net)?a. $200,000b. $230,000c. $410,000d. $430,000
On 1/1/2020, ABC Corporation balance sheet included the following accounts: Patents $100,000, Bonds Payable $40,000. Common Stock $10,000, Retained Earnings $50,000. Book values of assets and liabilities were equal to their fair values. XYZ Corporation acquired 100% of the common stock of ABC Corporation on 1/1/2020 for $120.000 Cash. Which of the following entries was prepared to record the acquisition on XYZ's books? Patents Bonds Payable Cash Investment in Subsidiary Goodwill Gain on Acquisition of Business Debit $100,000 Credit $40,000 Credit $120,000 Debit $60.000
When it purchased Sutton, Inc. on January 1, 20X1, Pavin Corporation issued 500,000 shares of its $5 par voting common stock. On that date the fair value of those shares totaled $4,200,000. Related to the acquisition, Pavin had payments to the attorneys and accountants of $200,000, and stock issuance fees of $100,000. Immediately prior to the purchase, the equity sections of the two firms appeared as follows: Pavin Sutton Common stock $ 4,000,000 $ 700,000 Paid-in capital in excess of par 7,500,000 900,000 Retained earnings 5,500,000 500,000 Total $17,000,000 $2,100,000 Immediately after the purchase, the consolidated balance sheet should report retained earnings of: a. $6,000,000 b. $5,800,000 c. $5,500,000 d. $5,300,000
On 1/1/2020, ABC Corporation balance sheet included the following accounts: Patents $100,000, Bonds Payable $40,000, Common Stock $10,000, Retained Earnings $50,000. Book values of assets and liabilities were equal to their fair values. XYZ Corporation acquired 100% of the common stock of ABC Corporation on 1/1/2020 for $120,000 Cash. Which of the following entries was prepared to record the acquisition on XYZ's books? Patents? [Debit or credit by what amount] Bonds Payable? [Debit or credit by what amount] Cash? [Debit or credit by what amount] Investment in Subsidiary? [Debit or credit by what amount] Goodwill? [Debit or credit by what amount] Gain on Acquisition of Business? [Debit or credit by what amount]
On December 31, 20X8, Paragraph Corporation acquired 80 percent of Sentence Company's common stock for $136,000. At the acquisition date, the book values and fair values of all of Sentence's assets and liabilities were equal. Paragraph uses the equity method in accounting for its investment. Balance sheet information provided by the companies at December 31, 20X8, immediately following the acquisition is as follows: Cash Accounts Receivable Inventory Fixed Assets (net) Investment in Sentence Co. Total Debits Accounts Payable Notes Payable Common Stock Retained Earnings Total Credits Assets Paragraph Corporation $ 74,000 120,000 180,000 Total Assets Liabilities and Stockholders' Equity 350,000 136,000 $860,000 Total Liabilities and Stockholders' Equity $ 65,000 350,000 150,000 295,000 $860,000 PARAGRAPH CORPORATION AND SUBSIDIARY Consolidated Balance Sheet December 31, 20X8 Required: Prepare a consolidated balance sheet for Paragraph at December 31, 20X8. Sentence Company $ 20,000…

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	Stroker
	Pushway	Book Value	Fair Value
Assets
Current assets	$	300,000		$	100,000	$	100,000
Long-term assets		600,000			400,000		470,000
Total assets	$	900,000		$	500,000	$	570,000
Liabilities
Current liabilities	$	200,000		$	50,000	$	50,000
Long-term liabilities		250,000			100,000		120,000
Total liabilities		450,000			150,000	$	170,000
Stockholders' equity
Common stock		300,000			250,000
Retained earnings		150,000			100,000
Total stockholders' equity		450,000			350,000
Total liabilities and equity	$	900,000		$	500,000