Scribd
Upload
18 views8 pages

Advanced Accounting Chapter 2 - Problems

The document outlines financial details related to the acquisition of a company, including fair value assets and liabilities, consideration provided, and allocation of payment. It also includes a consolidated balance sheet for Casey Corporation and its subsidiary Kennedy, detailing assets, liabilities, and equity adjustments. Key figures include total assets of $16,727,000 and total liabilities and equities of $(16,727,000).

Uploaded by

lexielingle1
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
18 views8 pages

Advanced Accounting Chapter 2 - Problems

The document outlines financial details related to the acquisition of a company, including fair value assets and liabilities, consideration provided, and allocation of payment. It also includes a consolidated balance sheet for Casey Corporation and its subsidiary Kennedy, detailing assets, liabilities, and equity adjustments. Key figures include total assets of $16,727,000 and total liabilities and equities of $(16,727,000).

Uploaded by

lexielingle1
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
You are on page 1/ 8

Consideration provided $ 800,000

Renn's FV Assets and Liabilities


Cash $ 150,000
Accounts Receivable $ 140,000
Capitalized software Costs $ 320,000
Goodwill $ -
IPRD $ 200,000
Liabilities $ (130,000)
Fair value of net identifiable assets $ 680,000
Goodwill $ 120,000
Accounts
Accounts Payable $ 15,000
Contingent Liability $ 20,000
Assumed Liabilities $ 60,000

Total Liabilities $ 95,000


Allocate Payment

Consideration $ 420,000

Current Assets $ 90,000


Building and Equipment net $ 250,000
Technology $ 25,000
IPRD $ 45,000
Liabilities $ (60,000)
Total Fair Value $ 350,000
Goodwill $ 70,000

Current Assets $ 90,000


Building and Equipment net $ 250,000
Goodwill $ 70,000
Technology $ 25,000
IPRD $ 45,000

Total Assets $ 480,000


Value of shares issued $ 153,000
Par value of shares issued $ 51,000
Additional paid-in capital (new shares) $ 102,000
Additional paid-in capital (existing shares) $ 90,000
Consolidated additional paid-in capital (fair value) $ 192,000

Eliminate all of the equity accounts for the purchased company


because the company is going away
Retained Earnings is the purchasing company amount
Common Stock ($5) $ 50,000
Additional Paid in capital ($35) $ 350,000
Consideration $ 400,000

Assets & Liabilities Acquired


Current Assets $ 60,000
Inventory $ 175,000
Patented tech $ 200,000
Land $ 225,000
Building and Equipment $ 75,000
Liabilities $ (350,000)
$ 385,000
Goodwill $ 15,000
P-17

Acquiring Company PT $ 230,000


Acquired Company PT (FV) $ 200,000
Consideration $ 430,000

P-18

Acquiring Company BV Common Stock $ 300,000


Acquiring Company new sale CS (Par value only) $ 50,000
Total consolidated common stock $ 350,000

P-19

Beginning Retained Earnings $ 130,000


Net Income (Revenue less Expenses) $ 80,000

Total consolidated retained earnings $ 210,000


CASEY CORPORATION AND CONSOLIDATED SUBSIDIARY KENNED
Worksheet for a Consolidated Balance Sheet
1-Jan-21

Casey Kennedy Adjust. & Elim.


Cash $ 457,000 $ 172,500
Accounts receivable $ 1,655,000 $ 347,000
Inventory $ 1,310,000 $ 263,500
Investment in Kennedy $ 3,300,000 $ -

Buildings (net) $ 6,315,000 $ 2,090,000 $ 382,000


Licensing agreements $ - $ 3,070,000
Goodwill $ 347,000 $ - $ 426,000
Total assets $ 13,384,000 $ 5,943,000
Accounts payable $ (394,000) $ (393,000)
Long-term debt $ (3,990,000) $ (2,950,000)
Common stock $ (3,000,000) $ (1,000,000) $ 1,000,000
Additional paid-in cap. $ - $ (500,000) $ 500,000
Retained earnings $ (6,000,000) $ (1,100,000) $ 1,100,000
Total liab. & equities $ (13,384,000) $ (5,943,000) $ 3,408,000

Entry S
Entry A
SUBSIDIARY KENNEDY
ance Sheet

Adjust. & Elim. Consolidated


$ 629,500
$ 2,002,000
$ 1,573,500
$ (2,600,000)
$ (700,000) $ -
$ 8,787,000
$ (108,000) $ 2,962,000
$ 773,000
$ 16,727,000
$ (787,000)
$ (6,940,000)
$ (3,000,000)
$ -
$ (6,000,000)
$ (3,408,000) $ (16,727,000)

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy