On June 30, 2000 Carl Corporation purchased Lin Company by issuing 50,000 shares of stock. Stock has a market value of 515.00 per share. This acquisition is to be recorded as a statutory merger through asset acquisition. In this type of business combination Carl company acquires all the assets and liabilities of Lin Company. Lin Company is dissolved and goes out of business. Prepare the entries the purchase and combination on June 30, 2000.

Following information is shown prior to the merger activity being recorded

Other information:

The Lin Company Plant Assets fair market value is $600,000.

The out of pocket costs of the merger are:

SEC Registration Statement fee ...............................................................$20,000

Legal fees for the SEC Registration Statement.......................................$15,000

Accounting fees for the SEC Registration Statement............................ $ 5,000

Finders Fee..................................................................................................$ 6,000

Legal fees for the merger...........................................................................$ 2,000

Amounting fees for the merger.................................................................$ 4,000

1. Prepare and post the entries to record this as a statutory merger In a statutory merger permanent dissolution of the subsidiary occurs at the combination date.

2. Prepare an after merger balance sheet

Transcribed Image Text:

Assets Cash Inventories Plant Land Total Assets Cash Accounts Receivable Plant Assets Total Carl Company $ 80.000 80,000 300,000 20,000 $480,000 Lin Company $200,000 20,000 530,000 $750,000 Liabilities and Capital Current Liabilities Common Stock $5PV Additional Paid in Capital Retained Earnings Total Liabilities and Capital Current Liabilities Common Stock $10PV Additional Paid in Capital Retained Earnings Total $ 80,000 10,000 190,000 200.000 $480,000 $100,000 150,000 400,000 100,000 $750,000 Assets Cash Inventories Plant Land Total Assets Cash Accounts Receivable Plant Assets Total Carl Company $ 80.000 80,000 300,000 20,000 $480,000 Lin Company $200,000 20,000 530,000 $750,000 Liabilities and Capital Current Liabilities Common Stock $5PV Additional Paid in Capital Retained Earnings Total Liabilities and Capital Current Liabilities Common Stock $10PV Additional Paid in Capital Retained Earnings Total $ 80,000 10,000 190,000 200.000 $480,000 $100,000 150,000 400,000 100,000 $750,000

Answer rating: 100% (QA)

1 Descriptions Debit Credit Cash Acdr 200000 Accounts Receivab... View the full answer