Question

On January 1, 16 Dennis Inc. acquired Larson Company's net assets in exchange for Dennis common...

On January 1, 16 Dennis Inc. acquired Larson Company's net assets in exchange for Dennis common stock with a par value of $100,000 and a fair value of $800,000. Dennis also paid $10,000 in direct acquisition costs and $20,000 in stock issuance costs.

​

On this date, Larson's condensed account balances showed the following:

​

​

Book Value

Fair Value

Current Assets

$280,000

$370,000

Plant and Equipment

440,000

480,000

Accumulated Depreciation

(100,000)

​

Intangibles – Patents

80,000

130,000

Current Liabilities

(140,000)

(140,000)

Long-Term Debt

(100,000)

(110,000)

Common Stock

(200,000)

​

Other Paid-in Capital

(120,000)

​

Retained Earnings

(140,000)

​

​

Required:

​

Record the Journal entries of Dennis purchase of Larson Company.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Date Particulars Dr. Amt Cr Amt.

Jan 1,16 Current assets 370,000

Plant and Machinery 480,000

Intangibles-Patents 130,000

Current Liabilities 140,000  

Accumulated Depreciation 100,000

Long-Term Debt 110,000

Other Paid in Capital 120,000

Business Consideration A/C 510,000

Jan 1,16 Business ConsiderationA/C 5,10,000

Capital Reserve 1,90,000

Direct Acquisition Cost 10,000

Stock Issuance Cost 20,000

Common stock A/C 100,000

Premium on Issuance 600,000  

Profit & Loss A/C 30,000

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
On January 1, 16 Brown Inc. acquired Larson Company's net assets in exchange for Brown's common...
On January 1, 16 Brown Inc. acquired Larson Company's net assets in exchange for Brown's common stock with a par value of $100,000 and a fair value of $800,000. Brown also paid $10,000 in direct acquisition costs and $15,000 in stock issuance costs. ​ On this date, Larson's condensed account balances showed the following: ​ ​ Book Value Fair Value Current Assets $280,000 $370,000 Plant and Equipment 440,000 480,000 Accumulated Depreciation (100,000) ​ Intangibles – Patents 80,000 120,000 Current Liabilities...
On January 1, 2017, Gardner, Inc. acquired 100 percent of the common stock of Drake Company...
On January 1, 2017, Gardner, Inc. acquired 100 percent of the common stock of Drake Company for $760,000 in cash and other fair-value consideration. Gardner Company fair value was allocated among its net assets as follows: The December 31, 2018 trial balance for the parent and subsidiary follows: Fair value of consideration transferred for Drake Company $760,000 Book value of Drake Company Common stock an APIC $130,000 Retained Earnings $370,000 $500,000 Excess Fair value over book value to: Trademark (10-year...
1. Dr. Pepper Snapple Group (DPSG) acquired the assets and liabilities of Turquoise Water Inc. on...
1. Dr. Pepper Snapple Group (DPSG) acquired the assets and liabilities of Turquoise Water Inc. on September 30, 2018, in a merger. The acquisition involves the following payments: Cash paid to Turquoise Water shareholders                                                                   $85,000,000 Cash paid to Morgan Stanley for consulting services                                                                   12,000,000 New stock issued, 100,000 shares, $0.50 par, fair value at acquisition                                                                   5,000,000 Stock registration fees, paid in cash                                                                   600,000 Earnings contingency, to be paid in three years, present value                                                                   2,000,000 Turquoise...
On January 1, 20X1, Honey Bee Corporation purchased the net assets of Green Hornet Company for...
On January 1, 20X1, Honey Bee Corporation purchased the net assets of Green Hornet Company for $1,500,000. On this date, a condensed balance sheet for Green Hornet showed: Book Fair Value Value Current Assets $ 500,000 $800,000 Long-Term Investments in Securities 200,000 150,000 Land 100,000 600,000 Buildings (net) 700,000 900,000 $1,500,000 Current Liabilities $ 300,000 $300,000 Long-Term Debt 550,000 600,000 Common Stock (no-par) 300,000 Retained Earnings 350,000 $1,500,000 Required: Record the entry on Honey Bee's books for the acquisition of...
On January 1, 20X8, Ramon Corporation acquired 75 percent of Tester Company's voting common stock for...
On January 1, 20X8, Ramon Corporation acquired 75 percent of Tester Company's voting common stock for $300,000. At the time of the combination, Tester reported common stock outstanding of $200,000 and retained earnings of $150,000, and the fair value of the noncontrolling interest was $100,000. The book value of Tester's net assets approximated market value except for patents that had a market value of $30,000 more than their book value. The patents had a remaining economic life of five years...
On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000...
On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000 cash consideration. The remaining 20 percent of Suarez had an acquisition-date fair value of $65,000. On January 1, Suarez possessed equipment (five-year remaining life) that was undervalued on its books by $25,000. Suarez also had developed several secret formulas that Jarel assessed at $50,000. These formulas, although not recorded on Suarez’s financial records, were estimated to have a 20-year future life. As of December...
Hamlen Corporation acquired 100 percent of Pink's Company's common stock on January 1, 2015. Balance sheet...
Hamlen Corporation acquired 100 percent of Pink's Company's common stock on January 1, 2015. Balance sheet data for the two companies immediately following the acquisition follow: .....................................................Hamlen.................. Pink's Cash.............................................$ 30,000 ..............$25,000 Accounts Receivable........................... 80,000 ................40,000 Inventory........................................ 150,000............... 55,000 Land.............................................. 65,000 ................40,000 Buildings and Equipment...................... 260,000............. 160,000 Less: Accumulated Depreciation............ (120,000)............. (50,000) Investment in Pong Company Stock.......... 150,000 Total Assets...................................... $615,000 ........$270,000 Accounts Payable...............................$ 45,000.......... $ 33,000 Taxes Payable.................................... 20,000............... 8,000 Bonds Payable ................................... 200,000........... 100,000 Common Stock..................................... 50,000 ............20,000 Retained...
Prime Company acquired 75% of the common stock of Second Company January 1, year one, for...
Prime Company acquired 75% of the common stock of Second Company January 1, year one, for $450,000 The consideration given was proportional to Second's fair value. On that date, Second had the following trial balance: account debit credit Additional paid in capital $100,000 Building (12-year life) $250,000 Common stock 170,000 Current assets 170,000 Equipment (6-yr life) 160,000 Land 110,000 Liabilities (due in 4 years) 300,000 Retained earnings 1/year 1 120,000 Totals $690,000 $690,000 During year one, Second reported net income...
2- Dubai Corporation acquired 100 percent of Sharjah Company's common stock on January 1, 2019. Balance...
2- Dubai Corporation acquired 100 percent of Sharjah Company's common stock on January 1, 2019. Balance sheet data for the two companies immediately following the acquisition follows: Item Dubai Corporation Sharjah Company Cash $ 30,000 $ 25,000 Accounts Receivable 80,000 40,000 Inventory 150,000 55,000 Land 65,000 40,000 Buildings and Equipment 260,000 160,000 Less: Accumulated Depreciation (120,000 ) (50,000 ) Investment in Spin Company Stock 150,000 Total Assets $ 615,000 $ 270,000 Accounts Payable $45,000 $33,000 Taxes Payable 20,000 8,000 Bonds...
Hamlen Corporation acquired 100 percent of Pink's Company's common stock on January 1, 2015. Balance sheet...
Hamlen Corporation acquired 100 percent of Pink's Company's common stock on January 1, 2015. Balance sheet data for the two companies immediately following the acquisition follow: .....................................................Hamlen.................. Pink's Cash.............................................$ 30,000 ..............$25,000 Accounts Receivable........................... 80,000 ................40,000 Inventory........................................ 150,000............... 55,000 Land.............................................. 65,000 ................40,000 Buildings and Equipment...................... 260,000............. 160,000 Less: Accumulated Depreciation............ (120,000)............. (50,000) Investment in Pong Company Stock.......... 150,000 Total Assets...................................... $615,000 ........$270,000 Accounts Payable...............................$ 45,000.......... $ 33,000 Taxes Payable.................................... 20,000............... 8,000 Bonds Payable ................................... 200,000........... 100,000 Common Stock..................................... 50,000 ............20,000 Retained...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT