P Company wishes to acquire S Co. for cash in an asset acquisition, and appraisals reveal that the inventory has a fair value $185,000, and the equipment has a current value of $645,000. The book value and fair value of liabilities are the same. The following balance sheets were reported on January 1, 2011, for P Company and S Company: PCo. $ 150,000 SCo. $ 30,000 Cash Inventory 450,000 150,000 Equipment (net) 1,320,000 570,000 Total $1.920,000 $750,000 Total liabilities $ 450,000 $150,000 Common stock, $20 par value Other contributed capital Retained earnings 600,000 300,000 375,000 105,000 495,000 195,000 Total $1,920,000 $750,000
P Company wishes to acquire S Co. for cash in an asset acquisition, and appraisals reveal that the inventory has a fair value $185,000, and the equipment has a current value of $645,000. The book value and fair value of liabilities are the same. The following balance sheets were reported on January 1, 2011, for P Company and S Company: PCo. $ 150,000 SCo. $ 30,000 Cash Inventory 450,000 150,000 Equipment (net) 1,320,000 570,000 Total $1.920,000 $750,000 Total liabilities $ 450,000 $150,000 Common stock, $20 par value Other contributed capital Retained earnings 600,000 300,000 375,000 105,000 495,000 195,000 Total $1,920,000 $750,000
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 11PB: On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received...
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