ollowing are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included a or Sol Company accounts. Padre Sol Company Company Book Values Fair Values 12/31 $ 54,400 353,000 341,300 142,500 363,700 259,900 Book Values 12/31 12/31 $ 115,250 240,750 440,000 680,000 835,000 313,000 (319,000) (127,000) Cash $ 54,400 353,000 286,000 163,000 294,000 229,000 (147,000) (30,000) (597,500) Receivables Inventory Land Building and equipment (net) Franchise agreements Accounts payable Accrued expenses Longterm liabilities (147,000) (30,000) (597,500) (957,500)
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
![Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included are fair values
for Sol Company accounts.
Padre
Sol Company
Company
Book Values
12/31
$
240,750
440,000
680,000
835,000
Book Values
Fair Values
12/31
$
353,000
286,000
163,000
294,000
229,000
(147,000)
(30,000)
(597,500)
12/31
54,400
353,000
341,300
Cash
115,250
54,400
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
142,500
363,700
259,900
(147,000)
(30,000)
(597,500)
313,000
(319,000)
(127,000)
(957,500)
(660,000)
(70,000)
(437,500)
(1,015,000)
962,000
(210,000)
(90,000)
(284,000)
(399,900)
379,000
Revenues
Expenses
Note: Parentheses indicate a credit balance.
On December 31, Padre acquires Sol's outstanding stock by paying $253,500 in cash and issuing 14,700 shares of its own common
stock with a fair value of $40 per share. Padre paid legal and accounting fees of $28.700 as well as $14,700 in stock issuance costs.
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.)
Worksheet
Amounts
Inventory
Land
Buildings and equipment
Franchise agreements
Goodwill
Revenues
Additional paid-in capital
Expenses
Retained earnings, 1/1
Retained earnings, 12/31](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1908dd21-cc72-4760-9c90-35855c870384%2F8fa8ca98-1217-4576-a0f0-f080b7322635%2Fisvfobp_processed.png&w=3840&q=75)
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