Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included a for Sol Company accounts. Cash Receivables Inventory Land Building and equipment (net) Franchise agreements Accounts payable Accrued expenses Longterm 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 Inventory Land Buildings and equipment Franchise agreements Goodwill Revenues Additional paid-in capital Expenses Retained earnings, 1/1 Retained earnings, 12/31 $ Amounts 12/31 Book Values 12/31 317,000 59,400 $ 240,000 381,000 520,000 296,000 762,500 170,000 Sol Company (70,000) (402, 500) (210,000) (90,000) (290,000) Fair Values 672,500 321,000 268,800 260,000 237,000 (354,000) (149,000) (149,000) (109,000) (40,000) (40,000) (1,132,500) (660,000) (660,000) (660,000) (980,000) (395,400) 936,000 370,000 12/31 Note: Parentheses indicate a credit balance. On December 31, Padre acquires Sol's outstanding stock by paying $219,000 in cash and issuing 15,600 shares of its own c stock with a fair value of $40 per share. Padre paid legal and accounting fees of $26,200 as well as $13,200 in stock issuan 59,400 381,000 349,100 142,900 387,500 Determine the value that would be shown in Padre's consolidated financial statements for each of the accounts listed. (Input amounts as positive values.)
Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included a for Sol Company accounts. Cash Receivables Inventory Land Building and equipment (net) Franchise agreements Accounts payable Accrued expenses Longterm 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 Inventory Land Buildings and equipment Franchise agreements Goodwill Revenues Additional paid-in capital Expenses Retained earnings, 1/1 Retained earnings, 12/31 $ Amounts 12/31 Book Values 12/31 317,000 59,400 $ 240,000 381,000 520,000 296,000 762,500 170,000 Sol Company (70,000) (402, 500) (210,000) (90,000) (290,000) Fair Values 672,500 321,000 268,800 260,000 237,000 (354,000) (149,000) (149,000) (109,000) (40,000) (40,000) (1,132,500) (660,000) (660,000) (660,000) (980,000) (395,400) 936,000 370,000 12/31 Note: Parentheses indicate a credit balance. On December 31, Padre acquires Sol's outstanding stock by paying $219,000 in cash and issuing 15,600 shares of its own c stock with a fair value of $40 per share. Padre paid legal and accounting fees of $26,200 as well as $13,200 in stock issuan 59,400 381,000 349,100 142,900 387,500 Determine the value that would be shown in Padre's consolidated financial statements for each of the accounts listed. (Input amounts as positive values.)
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter2: Financial Statements, Cash Flow,and Taxes
Section: Chapter Questions
Problem 1Q: Define each of the following terms:
Annual report; balance sheet; income statement
Common...
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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
Land
Building and equipment (net)
Franchise agreements
Accounts payable
Accrued expenses
Longterm liabilities
Common stock-$20 par value
Common stock-$5 par value
Additional paid-in capital
Retained earnings, 1/1
Revenues
Expenses
Inventory
Land
Accounts
Buildings and equipment
Franchise agreements
Goodwill
$
Revenues
Additional paid-in capital
Expenses
Retained earnings, 1/1
Retained earnings, 12/31
Padre
Company
Book Values
12/31
Amounts
Sol Company
Book
Values
12/31
Fair Values
12/31
59,400
381,000
349, 100
142,900
387,500
268,800
(149,000)
(40,000)
(1,132,500) (660,000) (660,000)
(660,000)
317,000
240,000
381,000
520,000 296,000
762,500 170,000
672,500
321,000
Note: Parentheses indicate a credit balance.
On December 31, Padre acquires Sol's outstanding stock by paying $219,000 in cash and issuing 15,600 shares of its own common
stock with a fair value of $40 per share. Padre paid legal and accounting fees of $26,200 as well as $13,200 in stock issuance costs.
(70,000)
(402, 500)
Determine the value that would be shown in Padre's consolidated financial statements for each of the accounts listed. (Input all
amounts as positive values.)
59,400 $
260,000 237,000
(354,000) (149,000)
(109,000)
(40,000)
(210,000)
(90,000)
(290,000)
(980,000) (395,400)
936,000 370,000
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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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