Pamrod Manufacturing acquired all the assets and liabilities of Stafford Industries on January 1, 20X2, in exchange for 4,000 shares of Pamrod's $20 par value common stock. Balance sheet data for both companies just before the merger are given as follows: Balance Sheet Items Assets Cash Accounts Receivable Inventory Land Buildings and Equipment Less: Accumulated Depreciation Total Assets Liabilities and Equities Accounts Payable Bonds Payable Common Stock: $20 par value $5 par value Additional Paid-In Capital Retained Earnings Total Liabilities and Equities Pamrod Manufacturing Book Value $ 70,000 100,000 200,000 50,000 600,000 (250,000) $ 770,000 $ 50,000 300,000 200,000 40,000 180,000 $ 770,000 Fair Value $ 70,000 100,000 375,000 80,000 540,000 $1,165,000 S 50,000 310,000 Stafford Industries Book Value $ 30,000 60,000 100,000 40,000 400,000 (150,000) $ 480,000 $ 10,000 150,000 100,000 20,000 200,000 $ 480,000 } Fair Value $ 30,000 60,000 160,000 30,000 350,000 $630,000 $ 10,000 145,000

Pamrod Manufacturing acquired all the assets and liabilities of Stafford Industries on January 1, 20X2, in exchange for 4,000 shares of Pamrod's $20 par value common stock. Balance sheet data for both companies just before the merger are given as follows: Balance Sheet Items Assets Cash Accounts Receivable Inventory Land Buildings and Equipment Less: Accumulated Depreciation Total Assets Liabilities and Equities Accounts Payable Bonds Payable Common Stock: $20 par value $5 par value Additional Paid-In Capital Retained Earnings Total Liabilities and Equities Pamrod Manufacturing Book Value $ 70,000 100,000 200,000 50,000 600,000 (250,000) $ 770,000 $ 50,000 300,000 200,000 40,000 180,000 $ 770,000 Fair Value $ 70,000 100,000 375,000 80,000 540,000 $1,165,000 S 50,000 310,000 Stafford Industries Book Value $ 30,000 60,000 100,000 40,000 400,000 (150,000) $ 480,000 $ 10,000 150,000 100,000 20,000 200,000 $ 480,000 } Fair Value $ 30,000 60,000 160,000 30,000 350,000 $630,000 $ 10,000 145,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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