P1-27 - 14,000 Deferred Stock Issue Costs 28,000 Record...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
CHAPTER 1 INTERCORPORATE ACQUISITIONS AND INVESTMENTS IN OTHER ENTITIES P1-27 Journal Entries to Record a Business Combination Journal entries to record acquisition of TKK net assets under purchase treatment: (1) Deferred Merger Costs 14,000 Cash 14,000 Record payment of legal fees. (2) Deferred Stock Issue Costs 28,000 Cash 28,000 Record costs of issuing stock. (3) Cash and Receivables 28,000 Inventory 122,000 Buildings and Equipment 470,000 Goodwill 26,000 Accounts Payable 41,000 Notes Payable 63,000 Common Stock 96,000 Additional Paid-In Capital 404,000 Deferred Merger Costs
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 14,000 Deferred Stock Issue Costs 28,000 Record purchase of TKK Corporation. Computation of goodwill Values of shares issued ($22 x 24,000) $528,000 Legal fees 14,000 Total purchase price $542,000 Fair value of net assets acquired ($620,000 - $104,000) (516,000 ) Goodwill $ 26,000 Computation of additional paid-in capital Number of shares issued 24,000 Issue price in excess of par value ($22 - $4) x $18 Total $432,000 Less: Deferred stock issue costs (28,000 ) Increase in additional paid-in capital $404,000...
View Full Document

Ask a homework question - tutors are online