The following financial statement information was prepared for Plue Corporation and Sparse Company at December 31, 20X2:

Question:

The following financial statement information was prepared for Plue Corporation and Sparse Company at December 31, 20X2:


image


Plue and Sparse agreed to combine as of January 1, 20X3. To effect the merger, Plue paid finder’s fees of $30,000 and legal fees of $24,000. Plue also paid $15,000 of audit fees related to the issuance of stock, stock registration fees of $8,000, and stock listing application fees of $6,000. At January 1, 20X3, book values of Sparse Company’s assets and liabilities approximated market value except for inventory with a market value of $200,000, buildings and equipment with a market value of $350,000, and bonds payable with a market value of $105,000. All assets and liabilities were immediately recorded on Plue’s books.



Required


Give all journal entries that Plue recorded assuming Plue issued 40,000 shares of $8 par value common stock to acquire all of Sparse’s assets and liabilities in a business combination. Plue common stock was trading at $14 per share on January 1, 20X3.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Advanced Financial Accounting

ISBN: 9781260772135

13th Edition

Authors: Theodore Christensen, David Cottrell, Cassy Budd

Question Posted: