The following are preliminary financial statements for Choco Co. and Cake Co. for the year ending December
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The following are preliminary financial statements for Choco Co. and Cake Co. for the year ending December 31, 2020 prior to Choco’s acquisition of Cake.
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Choco Co. Cake Co. Book Values Book Values Fair Values 120,000 240,000 120,000 480,000 (70,000) (38,000) (192,000) (96,000) (564,000) (360,000) 240,000 Cash and Receivable 30,000 90,000 108,000 336,000 30,000 94,000 Inventories Land 128,000 348,000 (100,000) (34,000) Building Accounts payable Long-term debt Common stock Additional paid in capital Retained earnings 12/31/20 Revenues (100,000) (32,000) (72,000) (12,000) (348,000) (228,000) 132,000 Expenses On 12/31/2020 Choco exchanged 20,000 shares of its $4 par value common stock for all the outstanding shares of Cake. Choco's stock on that date has a fair value (-market price) of $30 per share. Assume these two companies retained their separate legal identities. Choco Co. Cake Co. Book Values Book Values Fair Values 120,000 240,000 120,000 480,000 (70,000) (38,000) (192,000) (96,000) (564,000) (360,000) 240,000 Cash and Receivable 30,000 90,000 108,000 336,000 30,000 94,000 Inventories Land 128,000 348,000 (100,000) (34,000) Building Accounts payable Long-term debt Common stock Additional paid in capital Retained earnings 12/31/20 Revenues (100,000) (32,000) (72,000) (12,000) (348,000) (228,000) 132,000 Expenses On 12/31/2020 Choco exchanged 20,000 shares of its $4 par value common stock for all the outstanding shares of Cake. Choco's stock on that date has a fair value (-market price) of $30 per share. Assume these two companies retained their separate legal identities.
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Goodwill Calculation Purchase consideration 2000030 600000 Net Asset at fair value Land 128000 Build... View the full answer
Related Book For
Financial Accounting An Integrated Statements Approach
ISBN: 978-0324312119
2nd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
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