Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included are fair values for Sol Company accounts.
Padre Company |
Sol Company |
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Book Values | Book Values | Fair Values | |||||||||||||
12/31 | 12/31 | 12/31 | |||||||||||||
Cash | $ | 526,750 | $ | 88,800 | $ | 88,800 | |||||||||
Receivables | 222,750 | 359,000 | 359,000 | ||||||||||||
Inventory | 487,500 | 283,000 | 334,500 | ||||||||||||
Land | 610,000 | 136,000 | 115,400 | ||||||||||||
Building and equipment (net) | 677,500 | 326,000 | 392,300 | ||||||||||||
Franchise agreements | 245,000 | 243,000 | 280,700 | ||||||||||||
Accounts payable | (354,000 | ) | (134,000 | ) | (134,000 | ) | |||||||||
Accrued expenses | (108,000 | ) | (35,000 | ) | (35,000 | ) | |||||||||
Longterm liabilities | (977,500 | ) | (602,500 | ) | (602,500 | ) | |||||||||
Common stock—$20 par value | (660,000 | ) | |||||||||||||
Common stock—$5 par value | (210,000 | ) | |||||||||||||
Additional paid–in capital | (70,000 | ) | (90,000 | ) | |||||||||||
Retained earnings, 1/1 | (542,500 | ) | (338,000 | ) | |||||||||||
Revenues | (994,500 | ) | (379,300 | ) | |||||||||||
Expenses | 937,000 | 353,000 | |||||||||||||
Note: Parentheses indicate a credit balance.
On December 31, Padre acquires Sol’s outstanding stock by paying $426,000 in cash and issuing 11,700 shares of its own common stock with a fair value of $40 per share. Padre paid legal and accounting fees of $27,500 as well as $7,000 in stock issuance costs.
Determine the value that would be shown in Padre’s consolidated financial statements for each of the accounts listed. (Input all amounts as positive values.)
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