Phen Ltd. issued 500,000 common shares of $10 at par and paid $1,000,000 for the net...
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Phen Ltd. issued 500,000 common shares of $10 at par and paid $1,000,000 for the net assets of Sung Ltd. on August 17, 2014. The market value of Phen Ltd.'s stocks was $20 per share at the time. Sung Ltd. was dissolved immediately after the acquisition. The information related to Sung Ltd.'s net assets is as follows (in thousands)| Book Value Fair Value Cash $ 2,000 Trade receivables Inventories $2,000 600 3,000 Prepaid expenses Land Building-net Equipment-net Trade payable Notes payable Bonds payable Common stock, $5 par Retained Eamings 800 3,200 1,000 6,000 10,000 3,500 1,300 4,300 1,000 6,800 10,100 3,000 1,500 4,600 7,100 6,600 5,300 9,000 REQUIRED: Prepare the necessary joumal entries for the acquisition. Phen Ltd. issued 500,000 common shares of $10 at par and paid $1,000,000 for the net assets of Sung Ltd. on August 17, 2014. The market value of Phen Ltd.'s stocks was $20 per share at the time. Sung Ltd. was dissolved immediately after the acquisition. The information related to Sung Ltd.'s net assets is as follows (in thousands)| Book Value Fair Value Cash $ 2,000 Trade receivables Inventories $2,000 600 3,000 Prepaid expenses Land Building-net Equipment-net Trade payable Notes payable Bonds payable Common stock, $5 par Retained Eamings 800 3,200 1,000 6,000 10,000 3,500 1,300 4,300 1,000 6,800 10,100 3,000 1,500 4,600 7,100 6,600 5,300 9,000 REQUIRED: Prepare the necessary joumal entries for the acquisition.
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Fair value Cash 2000 Trade receivables 600 Inventories 3000 Pre... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-0134472140
13th edition
Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith
Posted Date:
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