1,900,000 Plant Assets 1,100,000 1,200,000 Current Liabilities (1,000,000) (1,000,00
1,900,000 Plant Assets 1,100,000 1,200,000 Current Liabilities (1,000,000) (1,000,00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
On 1/1/21 Pinn Corporation acquired all of Simm Corporation’s common stock by issuing #250,000 shares of $1 par value common stock with a current market value of $10,000,000. Related legal fees were $300,000 and were paid in cash. The book value and fair values of Simm’s accounts are given below:
|
Book Value DR (CR) |
Fair Value DR (CR) |
Current Assets |
1,900,000 |
1,900,000 |
Plant Assets |
1,100,000 |
1,200,000 |
Current Liabilities |
(1,000,000) |
(1,000,000) |
Long Term Liabilities |
(500,000) |
(475,000) |
Common Stock |
(800,000) |
|
|
(700,000) |
|
In addition, Simm has a previously unrecorded identifiable Intangible Asset with a fair value of $500,000.
Required:
- Prepare the entry on Pinn’s books to record the acquisition
- Prepare the working paper eliminating entries to consolidate the
balance sheets of Pinn Corporation and Simm Corporation at the date of acquisition.
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps

Recommended textbooks for you


Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,

Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,


Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,

Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON

Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education

Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education