Flynn acquires 100 percent of the outstanding voting shares of Macek Company on January 1, 2021. To obtain these shares, Flynn pays $400 cash (in thousands) and issues 10,00o0 shares of $20 par value common stock on this date. Flynn's stock had a fair value of $36 per share on that date. Flynn also pays $15 (in thousands) to a local investment firm for arranging the acquisition. An additional $10 (in thousands) was paid by Flynn in stock issuance costs. The book values for both Flynn and Macek immediately preceding the acquisition follow. The fair value of each of Flynn and Macek accounts is also included. In addition, Macek holds a fully amortized trademark that still retains a $40 (in thousands) value. The figures below are in thousands. Any related question also is in thousands. Macek Company Book Fair Flynn, Inc Value Value $ 900 480 $ 80 180 $ 80 Cash Receivables Inventory 160 260 120 300 130 280 660 300 Land 1,200 360 220 100 60 Buildings (net) Equipment Accounts payable Long-term liabilities Common stock Additional paid-in capital Retained earnings 75 480 60 340 80 300 1,140 1,000 200 1,080 480

Flynn acquires 100 percent of the outstanding voting shares of Macek Company on January 1, 2021. To obtain these shares, Flynn pays $400 cash (in thousands) and issues 10,00o0 shares of $20 par value common stock on this date. Flynn's stock had a fair value of $36 per share on that date. Flynn also pays $15 (in thousands) to a local investment firm for arranging the acquisition. An additional $10 (in thousands) was paid by Flynn in stock issuance costs. The book values for both Flynn and Macek immediately preceding the acquisition follow. The fair value of each of Flynn and Macek accounts is also included. In addition, Macek holds a fully amortized trademark that still retains a $40 (in thousands) value. The figures below are in thousands. Any related question also is in thousands. Macek Company Book Fair Flynn, Inc Value Value $ 900 480 $ 80 180 $ 80 Cash Receivables Inventory 160 260 120 300 130 280 660 300 Land 1,200 360 220 100 60 Buildings (net) Equipment Accounts payable Long-term liabilities Common stock Additional paid-in capital Retained earnings 75 480 60 340 80 300 1,140 1,000 200 1,080 480

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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