2.) XYZ Corporation issued 23,000 shares of $2 par value common stock in acquiring ABC 40,000 common stock on July 1, 2014. On July 1, 2014, XYZ common stock was selling at $16 per share. The following is balance sheet information of the two corporations before the business combination. АВС Fair Value $17,000 47,000 30,000 35,000 280,000 $409,000 XYZ АВС Book Value $17,000 42,000 40,000 45,000 220,000 $364,000 Book Cash Inventories Other current assets Land Plant and equipment-net Value $25,000 55,000 110,000 100,000 660,000 $950,000 $70,000 100,000 90,000 104,000 $364,000 $75,000 Liabilities Capital stock, $2 par value Additional paid-in capital Retained earnings $220,000 500,000 170,000 60,000 $950,000 Required: 1. Prepare the journal entry on XYZ Corporation's books to account for the investment in ABC Corp. 2. Prepare a consolidated balance sheet for XYZ and ABC immediately after the business combination.
2.) XYZ Corporation issued 23,000 shares of $2 par value common stock in acquiring ABC 40,000 common stock on July 1, 2014. On July 1, 2014, XYZ common stock was selling at $16 per share. The following is balance sheet information of the two corporations before the business combination. АВС Fair Value $17,000 47,000 30,000 35,000 280,000 $409,000 XYZ АВС Book Value $17,000 42,000 40,000 45,000 220,000 $364,000 Book Cash Inventories Other current assets Land Plant and equipment-net Value $25,000 55,000 110,000 100,000 660,000 $950,000 $70,000 100,000 90,000 104,000 $364,000 $75,000 Liabilities Capital stock, $2 par value Additional paid-in capital Retained earnings $220,000 500,000 170,000 60,000 $950,000 Required: 1. Prepare the journal entry on XYZ Corporation's books to account for the investment in ABC Corp. 2. Prepare a consolidated balance sheet for XYZ and ABC immediately after the business combination.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:2.) XYZ Corporation issued 23,000 shares of $2 par value common stock in acquiring ABC 40,000
common stock on July 1, 2014. On July 1, 2014, XYZ common stock was selling at $16 per share.
The following is balance sheet information of the two corporations before the business combination.
АВС
Book
Value
$17,000
42,000
40,000
45,000
220,000
$364,000
АВС
Fair
Value
$17,000
47,000
30,000
35,000
280,000
$409,000
XYZ
Book
Cash
Inventories
Other current assets
Land
Plant and equipment-net
Value
$25,000
55,000
110,000
100,000
660,000
$950,000
I
$75,000
Liabilities
Capital stock, $2 par value
Additional paid-in capital
Retained earnings
$220,000
500,000
170,000
60,000
$950,000
$70,000
100,000
90,000
104,000
$364,000
Required:
1. Prepare the journal entry on XYZ Corporation's books to account for the investment in ABC Corp.
2. Prepare a consolidated balance sheet for XYZ and ABC immediately after the business combination.
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