Genie Inc. is thinking about undertaking vertical integration by taking over the functions performed by one of their suppliers, Rogers Inc. Genie can either buy the net assets of, or 100% of the outstanding stock of Rogers for $500,000 plus $10,000 in direct acquisition costs. Below is financial information for Rogers as of 7/1/20X1: Assets Cash A/R Inventory Trademark Net Fixed Assets Total Assets $ Accounts Receivable Inventory Trademark Net Fixed Assets Goodwill Acquisition Expenses Book 100,000 50,000 550,000 $ 700,000 Rogers, Inc. Balance Sheet as of 7/1/20x1 A/P Accrued Expenses Common Stock at Par APIC, Common Stoc Cash FMV 75,000 50,000 25,000 300,000 Liabilities A/P Accrued Expenses Equity Total Liabilities & O.E. A) Complete the journal entry made by Genie to account for an asset purchase of Rogers on 7/1/20X1 by entering the proper amounts in the gray-shaded cells. Genie paid for the purchase price by issuing 10,000 shares of its stock which had a market value of $50 per share and a Par Value of $5 per share. When the correct amount is entered, the cell will change color: Account Debit $ 0 Book FMV 25,000 $25,000 75,000 75,000 600,000 $ 700,000 Credit 0
Genie Inc. is thinking about undertaking vertical integration by taking over the functions performed by one of their suppliers, Rogers Inc. Genie can either buy the net assets of, or 100% of the outstanding stock of Rogers for $500,000 plus $10,000 in direct acquisition costs. Below is financial information for Rogers as of 7/1/20X1: Assets Cash A/R Inventory Trademark Net Fixed Assets Total Assets $ Accounts Receivable Inventory Trademark Net Fixed Assets Goodwill Acquisition Expenses Book 100,000 50,000 550,000 $ 700,000 Rogers, Inc. Balance Sheet as of 7/1/20x1 A/P Accrued Expenses Common Stock at Par APIC, Common Stoc Cash FMV 75,000 50,000 25,000 300,000 Liabilities A/P Accrued Expenses Equity Total Liabilities & O.E. A) Complete the journal entry made by Genie to account for an asset purchase of Rogers on 7/1/20X1 by entering the proper amounts in the gray-shaded cells. Genie paid for the purchase price by issuing 10,000 shares of its stock which had a market value of $50 per share and a Par Value of $5 per share. When the correct amount is entered, the cell will change color: Account Debit $ 0 Book FMV 25,000 $25,000 75,000 75,000 600,000 $ 700,000 Credit 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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