Solution-Determine the value that be shown in financial

Determine the value that be shown in financial statements

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Reference no: EM131914587

Problem - 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
	Book Values	Book Values	Fair Values
	12/31	12/31	12/31
Cash	$510,750	$45,400	$45,400
Receivables	277,500	369,000	369,000
Inventory	487,500	243,000	297,800
Land	607,500	164,000	137,500
Buildings and equipment (net)	830,000	301,000	370,300
Franchise agreements	316,000	275,000	309,200
Accounts payable	(388,000)	(146,000)	(146,000)
Accrued expenses	(125,000)	(33,000)	(33,000)
Long-term liabilities	(1,102,500	(610,000)	(610,000)
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	(630,000)	(280,000)
Revenues	(1,037,750)	(383,400)
Expenses	984,000	355,000

Note: Parentheses indicate a credit balance.

On December 31, Padre acquires Sol's outstanding stock by paying $140,000 in cash and issuing 17,300 shares of its own common stock with a fair value of $40 per share. Padre paid legal and accounting fees of $20,700 as well as $6,700 in stock issuance costs.

Determine the value that would be shown in Padre and Sol's consolidated financial statements for each of the accounts listed. (Input all amounts as positive values.)

Accounts	Amounts
Inventory	$
Land	$
Buildings and equipment	$
Franchise agreements	$
Goodwill	$
Revenues	$
Additional paid-in capital	$
Expenses	$
Retained earnings, 1/1	$

Reference no: EM131914587

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Determine the value that be shown in financial statements

Reference no: EM131914587

Reference no: EM131914587

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