Prepare the stockholders equity section

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Reference no: EM132481155

Pumpworks Inc. and Seaworthy Rope Company agreed to merge on January 1. 20X3. On the date of the merger agreement, the companies reported the following data:

Balance Sheet Items

Pumpworks

 

Seaworthy Rope Comany

Book Value

 

Fair Value

Book Value

 

fair Value

Assets

 

 

 

 

 

 

Cash 8 Receivables

S     95,000

 

S 95,000

S 17,000

 

S 17,000

Inventory

103,000

 

169,000

27,000

 

39,000

Land

103,000

 

142,000

7,000

 

12,000

Plant 8 Equipment

416,000

pict

3111,000

215,000

;;.; pict

128,000

Less: Accumulated Depreciation

(136.000)

ure

 

(66,000)

ure

 

Total Assets

$ 581,000

 

$124,000

1200,000

 

5196,000

Liabilities 8 Equities

 

 

 

 

 

 

Current Liabilities

62,000

 

S 62,000

1 29,000

 

S 29,000

Capital Stock

226,000

 

 

26,500

 

 

Capital in Excess of Par Value

26,000

 

 

11,000

 

 

Retained Earnings

 

 

 

233.500

 

 

Total Liabilities 8 Equities

S 581,000

 

 

$200,000

 

 

Pumpworks has 11.300 shares of its $20 par value shares outstanding on January 1. 20X3. and Seaworthy has 5.300 shares of $5 par value stock outstanding. The market values of the shares are $320 and $70. respectively.

Question 1: Prepare the stockholders equity section of the combined company's balance sheet. assuming Pumpworks acquires all of Seaworthy's net assets by issuing:

1. 1.200 shares of common.

2. 1.900 shares of common.

3. 3.100 shares of common.

Reference no: EM132481155

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