1-38 - P1-38 Combined Balance Sheet Issue 700 shares 700 x...

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P1-38 Combined Balance Sheet Issue 700 shares: 700 x $300 = $210,000 – 100% (20,000+5,000+135,000) = $50,000 Book value Fair value Difference Inventory 30,000 42,000 12,000 Land 10,000 15,000 5,000 P&E net 120,000 140,000 20,000 Goodwill 13,000 50,000 Entry to record combination: Cash and Receivables 20,000 Inventory 42,000 Land 15,000 Plant and Equipment 140,000 Goodwill 13,000 Current Liabilities 20,000 Capital Stock (700 x $20) 14,000 Capital in Excess of Par Val (700 x ($300-20) 196,000 a. Purchase balance sheet: Bilge Pumpworks and Seaworthy Rope Company Combined Balance Sheet January 1, 20X3 Cash and Receivables $110,000 Current Liabilities $ 100,000 Inventory 142,000 Capital Stock 214,000 Land 115,000 Capital in Excess Plant and Equipment 540,000 of Par Value 216,000 Less: Accumulated Retained Earnings 240,000 Depreciation (150,000) Goodwill 13,000 $770,000 $ 770,000
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b. issue 1,100 shares 1,100 x $300 = $330,000 – 100% (20,000+5,000+135,000) = $170,000 Book value Fair value Difference Inventory 30,000 42,000 12,000 Land 10,000 15,000 5,000 P&E net 120,000 140,000 20,000 Goodwill 133,000 170,000 Entry to record combination: Cash and Receivables 20,000 Inventory 42,000 Land 15,000 Plant and Equipment 140,000 Goodwill 133,000 Current Liabilities 20,000 Capital Stock (1100x$20) 22,000 Capital in Excess of Par Val 308,000 Bilge Pumpworks and Seaworthy Rope Company
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  • Spring '08
  • staff
  • Balance Sheet, Generally Accepted Accounting Principles, Receivables Inventory Land Plant and Equipment Goodwill Current Liabilities Capital Stock, Inventory Land, Receivables Inventory Land

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