Smith Company is acquired by Roan Corporation on July 1, 2015. Roan exchanges 60,000 shares of its

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Smith Company is acquired by Roan Corporation on July 1, 2015. Roan exchanges 60,000 shares of its $1 par stock, with a fair value of $18 per share, for the net assets of Smith Company.

Roan incurs the following costs as a result of this transaction:

Acquisition costs......................................................$25,000

Stock registration and issuance costs.................................10,000

Total costs..............................................................$35,000

The balance sheet of Smyth Company, on the day of the acquisition, is as follows:

Smith Company is acquired by Roan Corporation on July 1,

The appraised fair values as of July 1, 2015, is as follows:
Inventory.......................................................$270,000
Equipment.......................................................220,000
Land..............................................................180,000
Buildings.........................................................300,000
Current liabilities.................................................80,000
Bonds payable...................................................425,000
Record the acquisition of Smyth Company on the books of Radar Corporation.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Advanced Accounting

ISBN: 978-1305084858

12th edition

Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng

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