Adjust Schedule 3for Acquisition Values

Because the project uses a situation you may encounter in practice, the reported results of New Castle Coffee on 3/31 included in Schedule 3 do not include any adjustments for the acquisition. Remember that the accounting department of New Castle Coffee would keep functioning as if the acquisition never occurred until new values are established. In practice, this is often a number of months following an acquisition to complete the appropriate accounting.

s. Using only the Balance Sheet Amounts in Schedule 3, calculate new balances by using the differences identified in Number 4 above and adding/subtracting to Schedule 3 amounts.

Only the Cash Account through Retained Earnings arerequiredtobe adjusted

For example:

Land

Schedule 3 Reported

Increase in Acquisition Value+

Schedule 3 Adjusted

$50,000

+10,000

$60,000