Pop Company issued 120,000 shares of $10 par common stock with a fair value of $2,550,000 for

Question:

Pop Company issued 120,000 shares of $10 par common stock with a fair value of $2,550,000 for all the voting common stock of Son Company. In addition, Pop incurred the following additional costs:

Legal fees to arrange the business combination ......................................... $25,000

Cost of SEC registration, including accounting and legal fees ......................... 12,000

Cost of printing and issuing new stock certificates ....................................... 3,000

Indirect costs of combining including allocated overhead and executive salaries....20,000

Immediately before the business combination in which Son Company was dissolved, Son's assets and equities were as follows (in thousands):

____________________ Book Value _________ Fair Value

Current assets ................ $1,000 .................. $1,100

Plant assets ................... 1,500 ..................... 2,200

Liabilities ...................... 300 ........................ 300

Common stock .............. 2,000

Retained earnings ............ 200

Required:

Assume that the business combination is a pooling of interests. Prepare all journal entries on Pop's books to record the business combination?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...