Question

Peachtree Corporation acquired 100 percent of the outstanding common stock of Standard Company in a business combination. Immediately before the business combination, the two businesses had the following balance sheets:
Peachtree agreed to give Standard’s shareholders $ 1,500 cash in exchange for all their Standard common stock. Standard’s equipment has a fair value of $ 1,100.
Required:
1. Prepare the entries for Peachtree and Standard to record the business combination.
2. Prepare the balance sheet of Peachtree immediately after the business combination.
3. Prepare the balance sheet of Standard immediately after the business combination.
4. Calculate the amount of the adjustment to the book value of Standard’s equity and the amount of goodwill.
5. Prepare a consolidated balance sheet immediately after the combination.


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  • CreatedSeptember 22, 2015
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