4. WILL RATE YOUR ANSWER IF IT IS CORRECT

Stockholders of Acme Company, Baltic Company, and Colt Company are considering alternative arrangements for a business combination. Balance sheets and the fair values of each companys assets on October 1, 2014, were as follows:

		Acme			Baltic		Colt
Assets		$3,920,950			$7,573,100		$957,490
Liabilities		$2,029,900			$2,207,570		$259,040
Common stock, $20 par value		2,003,100			1,792,400		543,110
Other contributed capital		0			605,800		191,530
Retained earnings (deficit)		(112,050	)		2,967,330		(36,190	)
Total equities		$3,920,950			$7,573,100		$957,490
Fair values of assets		$4,176,080			$9,040,000		$1,305,240

Acme Company shares have a fair value of $55. A fair (market) price is not available for shares of the other companies because they are closely held. Fair values of liabilities equal book values.

Question 4 of 5 -72 View Policies Current Attempt in Progress Stockholders of Acme Company, Baltic Company, and Colt Company are considering alternative arrangements for a business combination. Balance sheets and the fair values of each company's assets on October 1, 2014, were as follows: Assets Liabilities Common stock, $20 par value Other contributed capital Retained earnings (deficit) Total equities Fair values of assets Acme $3,920,950 $2,029,900 2,003,100 -0- (112,050 $3,920,950 $4,176,080 Baltic $7,573,100 $2,207,570 1,792,400 605,800 2,967,330 $7,573,100 $9,040,000 Colt $957,490 $259,040 543,110 191,530 (36,190) $957,490 $1,305,240 Acme Company shares have a fair value of $55. A fair (market) price is not available for shares of the other companies because they are closely held. Fair values of liabilities equal book values. (a) Prepare a balance sheet for the business combination. Assume the following: Acme Company acquires all the assets and assumes all the liabilities of Baltic and Colt Companies by issuing in exchange 140,620 shares of its common stock to Baltic Company and 39,600 shares of its common stock to Colt Company. (List assets in order of liquidity. Enter negative account balance with negative sign preceding the number e.g.-5,125 or parentheses e.g. (5,125).) ACME COMPANY Balance Sheet October 1, 2014 Assets Assets (except goodwill) $ Goodwill Total Assets $ Liabilities and Stockholders' Equity Liabilities $ Common Stock Other Contributed Capital Retained Earnings Total Liabilities and Stockholders' Equity $