Advanced Financial Accounting 12th Edition by Theodore Christensen solution manual
Goodwill
12,000
Accounts Payable
41,000
Notes Payable
63,000
Common Stock
96,000
Additional Paid-In Capital
404,000
Deferred Stock Issue Costs
28,000
Record purchase of SKK Corporation.
Computation of goodwill
Fair value of consideration given (24,000 x $22)
$528,000
Fair value of net assets acquired
($620,000 - $104,000)
(516,000)
Goodwill
$ 12,000
Computation of additional paid-in capital
Number of shares issued
24,000
Issue price in excess of par value ($22 - $4)
x $18
Total
$432,000
Less: Deferred stock issue costs
(28,000)
Increase in additional paid-in capital
$404,000
P1-29 Recording Business Combinations
Merger Expense
38,000
Deferred Stock Issue Costs
22,000
Cash
60,000
Cash and Equivalents
41,000
Accounts Receivable
73,000
Inventory
144,000
Land
200,000
Buildings
1,500,000
Equipment
300,000
Goodwill
127,000
Accounts Payable
35,000
Short-Term Notes Payable
50,000
Bonds Payable
500,000
Common Stock $2 Par
900,000
Additional Paid-In Capital
878,000
Deferred Stock Issue Costs
22,000
Computation of goodwill
Fair value of consideration given (450,000 x $4)
$1,800,000
Fair value of net assets acquired ($41,000
+ $73,000 + $144,000 + $200,000 + $1,500,000
+ $300,000 - $35,000 - $50,000 - $500,000)
(1,673,000)
Goodwill
$ 127,000
Computation of additional paid-in capital
Number of shares issued
450,000
Issue price in excess of par value ($4 - $2)
x $2
Total
$900,000
Less: Deferred stock issue costs
(22,000)
Increase in additional paid-in capital
$878,000
P1-30 Business Combination with Goodwill
a. Journal entry to record acquisition of Sink Company net assets:
Cash
20,000
Accounts Receivable
35,000
Inventory
50,000
Patents
60,000
Buildings and Equipment
150,000
Goodwill
38,000
Accounts Payable
55,000
Notes Payable
120,000
Cash
178,000
b. Balance sheet immediately following acquisition:
Pancor Corporation and Sink Company
Combined Balance Sheet
February 1, 20X3
Cash
$ 82,000
Accounts Payable
$140,000
Accounts Receivable
175,000
Notes Payable
270,000
Inventory
220,000
Common Stock
200,000
Patents
140,000
Additional Paid-In