Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included
Question:
Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included are fair values for Sol Company accounts.
On December 31, Padre acquires Sol’s outstanding stock by paying $360,000 in cash and issuing 10,000 shares of its own common stock with a fair value of $40 per share. Padre paid legal and accounting fees of $20,000 as well as $5,000 in stock issuance costs.
Determine the value that would be shown in Padre and Sol’s consolidated financial statements for each of the accounts listed.
Accounts
Inventory ............ Revenues
Land ...... Additional paid-in capital
Buildings and equipment ...... Expenses
Franchise agreements . Retained earnings, 1/1
Goodwill
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Step by Step Answer:
Advanced Accounting
ISBN: 9781260247824
14th Edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik