Week1_Bancroft

Week1_Bancroft - Student Name Misty Bancroft Class...

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Student Name: Misty Bancroft Class: ACC431-50375-1109 Problem 02-19 MARSHALL COMPANY Part a. Marshall and Tucker Consolidated Balances Marshall's acquisition of Tucker represents a bargain purchase because the fair value of the net assets acquired exceeds the fair value of the consideration transaction as follows: Fair value of consideration transferred $400,000 Fair value of net assets acquired 515,000 Gain on bargain purchase $115,000 Correct! Record 3 transactions that occurred to create the business combination: MARSHALL COMPANY General Journal Account Debit Credit Investment in Tucker 515,000 «- Correct! Common stock 20,000 Additional paid-in capital 180,000 Liabilities 200,000 Gain on investment 115,000 (To record liabilities and stock issued for Tucker acquisition at fair value) Combination expenses 30,000 «- Correct! Cash 30,000 (To record payment of combination fees) Additional paid-in capital 12,000 «- Correct! Cash 12,000 (To record payment of stock issuance costs) Marshall's trial balance is adjusted for the transactions (as shown in the worksheet that follows). Consideration transferred at fair value $400,000 Book value (assets minus liabilities 460,000 or stockholders' equity) Book value in excess of consideration 60,000 Allocation to specific accounts based on fair value: Inventory 5,000 Land 20,000 Buildings 30,000 Bargain purchase (fair market value in excess of purchase price)
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Student Name: Misty Bancroft Class: ACC431-50375-1109 Problem 02-19 Account Name Balance Explanation Cash Receivables Inventory Land Buildings Equipment Total Assets Accounts Payable Long-term Liabilities Common Stock Additional Paid-In Capital Retained Earnings Total Liabilities & Equity
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Student Name: Misty Bancroft
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This note was uploaded on 09/28/2011 for the course ACC 431 taught by Professor Talbert during the Spring '08 term at National.

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Week1_Bancroft - Student Name Misty Bancroft Class...

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