Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included are fair values for Sol Company accounts. Cash Receivables Inventory Items Land Building and equipment (net) Franchise agreements Accounts payable Accrued expenses Long-term liabilities Common stock-$20 par value Common stock-$5 par value Additional paid-in capital Retained earnings, 1/1 Revenues Expenses Padre Company Book Values 12/31 $ 240, 250 253,500 490,000 637,500 745,000 317,000 (302,000) (100,000) Accounts (1,040,000) (660,000) Inventory Land Buildings and equipment Franchise agreements Goodwill Revenues Additional paid-in capital Expenses Retained earnings, 1/1 Retained earnings, 12/31 0 (70,000) (465,000) (984,250) 938,000 Sol Company Amounts Book Values 12/31 $ 71,300 341,000 243,000 195,000 274,000 241,000 (164,000) (37,000) (552,500) 0 (210,000) (90,000) (285,000) (433,800) 407,000 Fair values 12/31 $ 71,300 341,000 300,400 165,200 334,800 Note: Parentheses indicate a credit balance. On December 31, Padre acquires Sol's outstanding stock by paying $165,000 in cash and Issuing 16,300 shares of its own common stock with a fair value of $40 per share. Padre paid legal and accounting fees of $21,900 as well as $10,000 in stock Issuance costs. 271,300 (164,000) (37,000) (552,500) Required: Determine the value that would be shown in Padre's consolidated financial statements for each of the accounts listed: Note: Input all amounts as positive values. 0 0 0 0
Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included are fair values for Sol Company accounts. Cash Receivables Inventory Items Land Building and equipment (net) Franchise agreements Accounts payable Accrued expenses Long-term liabilities Common stock-$20 par value Common stock-$5 par value Additional paid-in capital Retained earnings, 1/1 Revenues Expenses Padre Company Book Values 12/31 $ 240, 250 253,500 490,000 637,500 745,000 317,000 (302,000) (100,000) Accounts (1,040,000) (660,000) Inventory Land Buildings and equipment Franchise agreements Goodwill Revenues Additional paid-in capital Expenses Retained earnings, 1/1 Retained earnings, 12/31 0 (70,000) (465,000) (984,250) 938,000 Sol Company Amounts Book Values 12/31 $ 71,300 341,000 243,000 195,000 274,000 241,000 (164,000) (37,000) (552,500) 0 (210,000) (90,000) (285,000) (433,800) 407,000 Fair values 12/31 $ 71,300 341,000 300,400 165,200 334,800 Note: Parentheses indicate a credit balance. On December 31, Padre acquires Sol's outstanding stock by paying $165,000 in cash and Issuing 16,300 shares of its own common stock with a fair value of $40 per share. Padre paid legal and accounting fees of $21,900 as well as $10,000 in stock Issuance costs. 271,300 (164,000) (37,000) (552,500) Required: Determine the value that would be shown in Padre's consolidated financial statements for each of the accounts listed: Note: Input all amounts as positive values. 0 0 0 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included are fair values
for Sol Company accounts.
Cash
Receivables
Inventory
Items
Land
Building and equipment (net)
Franchise agreements
Accounts payable
Accrued expenses
Long-term liabilities
Common stock-$20 par value
Common stock-$5 par value
Additional paid-in capital
Retained earnings, 1/1
Revenues
Expenses
Accounts
Padre Company
Book Values 12/31
$ 240, 250
253,500
490,000
637,500
745,000
317,000
Inventory
Land
Buildings and equipment
Franchise agreements
Goodwill
(302,000)
(100,000)
Revenues
Additional paid-in capital
Expenses
Retained earnings, 1/1
Retained earnings, 12/31
(1,040,000)
(660,000)
(70,000)
(465,000)
(984,250)
938,000
Sol Company
Book Values
12/31
$ 71,300
341,000
243,000
195,000
274,000
Amounts
241,000
(164,000)
(37,000)
(552,500)
0
(210,000)
(90,000)
(285,000)
(433,800)
407,000
Note: Parentheses Indicate a credit balance.
On December 31, Padre acquires Sol's outstanding stock by paying $165,000 in cash and Issuing 16,300 shares of its own common
stock with a fair value of $40 per share. Padre paid legal and accounting fees of $21,900 as well as $10,000 in stock Issuance costs.
Fair values
12/31
$ 71,300
341,000
300,400
165,200
334,800
271,300
(164,000)
(37,000)
(552,500)
Required:
Determine the value that would be shown in Padre's consolidated financial statements for each of the accounts listed:
Note: Input all amounts as positive values.
0
0
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Step 1: Meaning of Investment in Associates and Joint venture and Subsidiary
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VIEWStep 3: Calculation of Additional Paid Up capital and Retained Earning, 12/31.
VIEWStep 4: Prepare Amounts to be shown in consolidated statements of Listed Accounts
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