Following are the balance sheets of Boogie Musical Corporation and Toot-Toot Tuba Company as of December 31, 20X5.

In preparation for a possible business combination, a team of experts from Boogie Musical made a thorough examination and audit of Toot-Toot Tuba. They found that Toot-Toot’s assets and liabilities were correctly stated except that they estimated uncollectible accounts at $1,400. The experts also estimated the market value of the inventory at $35,000 and the market value of the plant and equipment at $500,000. The business combination took place on January 1, 20X6, and on that date Boogie Musical acquired all the assets and liabilities of Toot-Toot Tuba. On that date, Boogie’s common stock was selling for $55 per share.

Record the combination on Boogie’s books assuming that Boogie issued 9,000 of its $10 par common shares in exchange for Toot-Toot’s assets andliabilities.

  • CreatedMay 23, 2014
  • Files Included
Post your question