In_Class_Exercise_Chapter 2

In_Class_Exercise_Chapter 2 - Chapter 2: Illustration:...

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Chapter 2: Illustration: Acquisition Method Pride Corp. paid $3.2 million for the voting common stock of Side Corporation on January 1, 2011. The purchase price consisted of 100,000 shares of Pride Inc. common stock ($10 par) with a market value of $2 million ($20 per share) plus $1,200,000 cash. In addition, Pride paid $50,000 for registering and issuing the 100,000 shares of common stock and $100,000 for other direct costs of combination (e.g., payments to accountants, attorneys, and investment bankers) Balance sheet information for the companies immediately before the business combination is summarized below: Pride Corp. Side Inc. Side Fair (In U.S. $thousands) Book Value Book Value Value Assets: Cash $ 3,000 $240 $240 A/R, net 1,300 360 360 Notes receivable, net 1,500 300 300 Inventories 2,500 420 500 Other current assets 700 180 200 Land 2,000 100 200 Buildings, net 9,000 600 1,200 Equipment, net 10,000 800 600 Total Assets $30,000 $3,000 $3,600 Liabilities Accounts payable
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This note was uploaded on 11/05/2011 for the course ACCT 501 taught by Professor Ma during the Fall '11 term at South Carolina.

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In_Class_Exercise_Chapter 2 - Chapter 2: Illustration:...

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