Condensed balance sheets for Novak Company and Crane Company on January 1, 2023, are as follows: Current assets Plant and equipment (net) Total assets Total liabilities Common stock, $10 par value Other contributed capital Retained earnings (deficit) Total liabilities and equities Novak $414,000 1,035,000 $1,449,000 $218,500 805,000 287,500 $1,449,000 Account Titles and Explanation Crane $195,500 322,000 $517,500 $80,500 368,000 121,900 138,000 (52,900) $517,500 On January 1, 2023, the stockholders of Novak and Crane agreed to a consolidation. Because FASB requires that one party be recognized as the acquirer and the other as the acquiree, it was agreed that Novak was acquiring Crane. Novak agreed to issue 46.000 shares of its $10 par stock to acquire all the net assets of Crane at a time when the fair value of Novak's common stock was $15 per share. On the date of consolidation, the fair values of Crane's current assets and liabilities were equal to their book values. The fair value of plant and equipment was, however, $332,000. Novak will incur $46,000 of direct acquisition costs and $13,800 in stock issue costs. Prepare the journal entries on the books of Novak to record the acquisition of Crane Company's net assets. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List all debit entries before credit entries) Debit Credit
Condensed balance sheets for Novak Company and Crane Company on January 1, 2023, are as follows: Current assets Plant and equipment (net) Total assets Total liabilities Common stock, $10 par value Other contributed capital Retained earnings (deficit) Total liabilities and equities Novak $414,000 1,035,000 $1,449,000 $218,500 805,000 287,500 $1,449,000 Account Titles and Explanation Crane $195,500 322,000 $517,500 $80,500 368,000 121,900 138,000 (52,900) $517,500 On January 1, 2023, the stockholders of Novak and Crane agreed to a consolidation. Because FASB requires that one party be recognized as the acquirer and the other as the acquiree, it was agreed that Novak was acquiring Crane. Novak agreed to issue 46.000 shares of its $10 par stock to acquire all the net assets of Crane at a time when the fair value of Novak's common stock was $15 per share. On the date of consolidation, the fair values of Crane's current assets and liabilities were equal to their book values. The fair value of plant and equipment was, however, $332,000. Novak will incur $46,000 of direct acquisition costs and $13,800 in stock issue costs. Prepare the journal entries on the books of Novak to record the acquisition of Crane Company's net assets. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List all debit entries before credit entries) Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Account
ACC 405, struggling to prepare
Transcribed Image Text:Current Attempt in Progress
Condensed balance sheets for Novak Company and Crane Company on January 1, 2023, are as follows:
Current assets
Plant and equipment (net)
Total assets
Total liabilities
Common stock, $10 par value
Other contributed capital
Retained earnings (deficit)
Total liabilities and equities
Novak
$414,000 $195,500
1,035,000
$1,449,000
$218,500
805,000
287,500
138,000
$1,449,000
Crane
Account Titles and Explanation
322,000
$517,500
$80,500
368,000
121,900
(52,900)
$517,500
On January 1, 2023, the stockholders of Novak and Crane agreed to a consolidation. Because FASB requires that one party be
recognized as the acquirer and the other as the acquiree, it was agreed that Novak was acquiring Crane. Novak agreed to issue 46.000
shares of its $10 par stock to acquire all the net assets of Crane at a time when the fair value of Novak's common stock was $15 per
share.
On the date of consolidation, the fair values of Crane's current assets and liabilities were equal to their book values. The fair value of
plant and equipment was, however, $332,000. Novak will incur $46,000 of direct acquisition costs and $13.800 in stock issue costs.
Prepare the journal entries on the books of Novak to record the acquisition of Crane Company's net assets. (Credit account titles are
automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and
enter 0 for the amounts. List all debit entries before credit entries.)
Debit
Credit
Transcribed Image Text:Condensed balance sheets for Novak Company and Crane Company on January 1, 2023, are as follows:
Current assets
Plant and equipment (net)
Total assets
Total liabilities
Common stock, $10 par value
Other contributed capital
Retained earnings (deficit)
Total liabilities and equities
Novak
$414,000
1,035,000
$1,449,000
$218,500
Account Titles and Explanation
805,000
287,500
138,000
$1.449.000
Crane
$195,500
322,000
$517,500
$80,500
368,000
121,900
(52,900)
$517.500
On January 1, 2023, the stockholders of Novak and Crane agreed to a consolidation. Because FASB requires that one party be
recognized as the acquirer and the other as the acquiree, it was agreed that Novak was acquiring Crane. Novak agreed to issue 46,000
shares of its $10 par stock to acquire all the net assets of Crane at a time when the fair value of Novak's common stock was $15 per
share.
On the date of consolidation, the fair values of Crane's current assets and liabilities were equal to their book values. The fair value of
plant and equipment was, however, $332,000. Novak will incur $46,000 of direct acquisition costs and $13,800 in stock issue costs.
Prepare the journal entries on the books of Novak to record the acquisition of Crane Company's net assets. (Credit account titles are
automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and
enter 0 for the amounts. List all debit entries before credit entries.)
Debit
Credit
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