Question

Door Corporation acquires the net assets, exclusive of cash, of Walsh Company on January 1, 2011, at which time Walsh Company’s balance sheet is as follows:
Door Corporation feels that the following fair values should be used for Walsh’s book values:
Cash (no change) ................ $ 30,000
Accounts receivable .............. 60,000
Investment in marketable securities ........ 150,000
Land .................... 450,000
Buildings (no change) ............. 450,000
Equipment .................. 600,000
Accounts payable ................ 120,000
Income tax payable (no change).......... 190,000
Door issues 20,000 shares of its common stock with a $2 par value and a quoted fair value of $60 per share on January 1, 2011, to Walsh Company to acquire the net assets. Door also agrees that two years from now it will issue additional securities to compensate Walsh shareholders for any decline in value below that on the date of issue.
Required


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  • CreatedApril 10, 2015
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