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Acquisition Entries, Acquisition Costs, Bargain Gain Plastic Corporation is contemplating a business combination with Steel Corporation at December 31, 2021. Steel's condensed balance sheet on that date appears below: Assets Cash and receivables Inventory Equity method investments Land Buildings and equipment Patents Total assets Liabilities and Stockholders' Equity Liabilities Common stock Retained earnings Total liabilities and equity Description Cash and receivables Inventory Equity method investments Land Buildings and equipment Patents Goodwill Liabilities Required Prepare the journal entry to record the business combination of Plastic and Steel for each of the following acquisition costs and combination methods. (a) Plastic acquires Steel as a merger for $250,000 cash. Other direct cash acquisition costs are $20,000. General Journal Book Fair Value Value $10,000 $10,000 35,000 45,000 + 26,000 31,000 7,000 14,000 5,000 10,000 $83,000 $22,000 $22,000 25,000 36,000 $83,000 Debit 0 0 0 0 0 0 0 0 0 Credit 0 0 0 0 0 0 0 0 0

Acquisition Entries, Acquisition Costs, Bargain Gain Plastic Corporation is contemplating a business combination with Steel Corporation at December 31, 2021. Steel's condensed balance sheet on that date appears below: Assets Cash and receivables Inventory Equity method investments Land Buildings and equipment Patents Total assets Liabilities and Stockholders' Equity Liabilities Common stock Retained earnings Total liabilities and equity Description Cash and receivables Inventory Equity method investments Land Buildings and equipment Patents Goodwill Liabilities Required Prepare the journal entry to record the business combination of Plastic and Steel for each of the following acquisition costs and combination methods. (a) Plastic acquires Steel as a merger for $250,000 cash. Other direct cash acquisition costs are $20,000. General Journal Book Fair Value Value $10,000 $10,000 35,000 45,000 + 26,000 31,000 7,000 14,000 5,000 10,000 $83,000 $22,000 $22,000 25,000 36,000 $83,000 Debit 0 0 0 0 0 0 0 0 0 Credit 0 0 0 0 0 0 0 0 0

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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(b) Plastic acquires Steel as a merger for $85,000 cash. Other direct cash acquisition costs are $5,000. General Journal Description Cash and receivables Inventory Equity method investments Land Buildings and equipment Patents Liabilities Cash Description ♦ Acquisition expenses ◆ ◆ Debit Please answer all parts of the question. 0 O O O O O Debit 0 OOO OO 0 0 0 O O O 0 Credit (c) Plastic acquires all of Steel's stock for $275,000 cash, in a stock acquisition. Other direct cash acquisition costs are $15,000. General Journal 0 O o o o o o o o o o Credit 0 0 0 0 0 0 O O O 0 0 0
Transcribed Image Text:(b) Plastic acquires Steel as a merger for $85,000 cash. Other direct cash acquisition costs are $5,000. General Journal Description Cash and receivables Inventory Equity method investments Land Buildings and equipment Patents Liabilities Cash Description ♦ Acquisition expenses ◆ ◆ Debit Please answer all parts of the question. 0 O O O O O Debit 0 OOO OO 0 0 0 O O O 0 Credit (c) Plastic acquires all of Steel's stock for $275,000 cash, in a stock acquisition. Other direct cash acquisition costs are $15,000. General Journal 0 O o o o o o o o o o Credit 0 0 0 0 0 0 O O O 0 0 0
Acquisition Entries, Acquisition Costs, Bargain Gain Plastic Corporation is contemplating a business combination with Steel Corporation at December 31, 2021. Steel's condensed balance sheet on that date appears below: Assets Cash and receivables Inventory Equity method investments Land Buildings and equipment Patents Total assets Liabilities and Stockholders' Equity Liabilities Common Retained earnings Total liabilities and equity Description Cash and receivables Inventory Equity method investments Land Buildings and equipment Patents Goodwill Liabilities Required Prepare the journal entry to record the business combination of Plastic and Steel for each of the following acquisition costs and combination methods. (a) Plastic acquires Steel as a merger for $250,000 cash. Other direct cash acquisition costs are $20,000. General Journal ◆ Book Fair Value Value $10,000 $10,000 35,000 45,000 ◆ 26,000 31,000 7,000 14,000 5,000 10,000 $83,000 $22,000 $22,000 25,000 36,000 $83,000 Debit 0 0 0 0 оооооо 0 0 0 Credit 0 0 0 0 0 0 OOO O 0
Transcribed Image Text:Acquisition Entries, Acquisition Costs, Bargain Gain Plastic Corporation is contemplating a business combination with Steel Corporation at December 31, 2021. Steel's condensed balance sheet on that date appears below: Assets Cash and receivables Inventory Equity method investments Land Buildings and equipment Patents Total assets Liabilities and Stockholders' Equity Liabilities Common Retained earnings Total liabilities and equity Description Cash and receivables Inventory Equity method investments Land Buildings and equipment Patents Goodwill Liabilities Required Prepare the journal entry to record the business combination of Plastic and Steel for each of the following acquisition costs and combination methods. (a) Plastic acquires Steel as a merger for $250,000 cash. Other direct cash acquisition costs are $20,000. General Journal ◆ Book Fair Value Value $10,000 $10,000 35,000 45,000 ◆ 26,000 31,000 7,000 14,000 5,000 10,000 $83,000 $22,000 $22,000 25,000 36,000 $83,000 Debit 0 0 0 0 оооооо 0 0 0 Credit 0 0 0 0 0 0 OOO O 0
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