On January 1, Pan Corporation pays $400,000 cash and also issues 36,000 shares of $10 par common
Question:
On January 1, Pan Corporation pays $400,000 cash and also issues 36,000 shares of $10 par common stock with a market value of $660,000 for all the outstanding common shares of Sis Corporation. In addition, Pan pays $60,000 for registering and issuing the 36,000 shares and $140,000 for the other direct costs of the business combination, in which Sis Corporation is dissolved. Summary balance sheet information for the companies immediately before the merger is as follows (in thousands):
REQUIRED: Prepare all journal entries on Pan's books to account for theacquisition.
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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Pan Book Sis Book Sis Fair Value Value Value $ 80 $ 80 Cash S700 Inventories 240 160 200 Other current assets 60 40 40 Plant assets-net Total assets 520 360 560 $1,520 $640 S880 $ 60 $ 60 Current liabilities $320 Other liabilities 160 100 80 Common stock, $10 par Retained earnings 840 400 200 80 $640 $1.520 Total liabilities and owners' equity
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Journal entries on the books of Pan Corporation to record merger with Sis Corporation Inve...View the full answer
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A journal entry is an act of keeping or making records of any transactions either economic or non-economic. Transactions are listed in an accounting journal that shows a company\'s debit and credit balances. The journal entry can consist of several recordings, each of which is either a debit or a credit