On January 1, 2010, Peach Company issued 1,500 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 Swartz Company in a purchase transaction. Registration costs amounted to $1,700, paid in cash. Just prior to the acquisition, the balance sheets of the two companies were as follows:

Any difference between the book value of equity and the value implied by the purchase price relates to goodwill.

A. Prepare the journal entry on Peach Company’s books to record the exchange of stock.
B. Prepare a Computation and Allocation Schedule for the difference between book value and value implied by the purchase price.
C. Prepare a consolidated balance sheet at the date ofacquisition.

  • CreatedMarch 13, 2015
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