McCoy has the following account balances as of December 31, 2020 before an acquisition transaction takes place. Inventory $125,000 Land 450,000 Buildings 575,000 Liabilities (590,000) Common stock ($10 par) (75,000) APIC (200,000) Retained earnings (12/31/20) (285,000) The fair value of McCoy’s Land and Buildings are $650,000 and $600,000, respectively. On December 31, 2020, Ferguson Company issues 30,000 shares of its $10 par value ($30 fair value) common stock in exchange for all of the shares of McCoy’s common stock. Ferguson paid $12,000 for costs to issue the new shares of stock. Before the acquisition, Ferguson has $800,000 in its common stock account and $350,000 in its additional paid-in capital account. What will the consolidated common stock account be as a result of this acquisition?
McCoy has the following account balances as of December 31, 2020 before an acquisition transaction takes place. Inventory $125,000 Land 450,000 Buildings 575,000 Liabilities (590,000) Common stock ($10 par) (75,000) APIC (200,000) Retained earnings (12/31/20) (285,000) The fair value of McCoy’s Land and Buildings are $650,000 and $600,000, respectively. On December 31, 2020, Ferguson Company issues 30,000 shares of its $10 par value ($30 fair value) common stock in exchange for all of the shares of McCoy’s common stock. Ferguson paid $12,000 for costs to issue the new shares of stock. Before the acquisition, Ferguson has $800,000 in its common stock account and $350,000 in its additional paid-in capital account. What will the consolidated common stock account be as a result of this acquisition?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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McCoy has the following account balances as of December 31, 2020 before an acquisition transaction takes place.
| Inventory | $125,000 |
| Land | 450,000 |
| Buildings | 575,000 |
| Liabilities | (590,000) |
| Common stock ($10 par) | (75,000) |
| APIC | (200,000) |
| (285,000) | |
The fair value of McCoy’s Land and Buildings are $650,000 and $600,000, respectively. On December 31, 2020, Ferguson Company issues 30,000 shares of its $10 par value ($30 fair value) common stock in exchange for all of the shares of McCoy’s common stock. Ferguson paid $12,000 for costs to issue the new shares of stock. Before the acquisition, Ferguson has $800,000 in its common stock account and $350,000 in its additional paid-in capital account.
What will the consolidated common stock account be as a result of this acquisition?
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