Please do not give solution in image format thanku On January 1, 2016, Prima Company issued 1,500 of its$20 par value common shares with a fair value of $50per share in exchange for 2,000 outstanding commonshares of Swatch Company in a purchase transaction.Registration costs amounted to $1,700 paid in cash.Just prior to the acquisition, the balance sheets of thetwo companies were as follows:CashAccounts Receivable (net)InventoryPlant and Equipment (net)LandTotal AssetsAccounts PayableNotes PayableCommon Stock, $20 parvalueOther Contributed CapitalRetained EarningsTotal Liabilities andEquitiesPrima95,00058,00095,000CashLand26,00060,00039,000$ 73,000$ 347,000$ 66,00082,000100,000$ 347,000Swatch$13,00019,00025,000Common StockOther Contributed Capital43,00020,000$ 120,00016,00021,00040,00024,00019,000Any differences between the book value of equity andthe value implied by the purchase price relates to Land.Required:$ 120,000Prepare the journal entry on Prima's books to recordthe exchange of stock.Prepare a Computation and Allocation Schedule forthe Difference between book value and value impliedby the purchase price.Calculate the consolidated balance for each of thefollowing accounts as of December 31, 2016:

1) Journal entry on Prima's Books Date Account title Debit ($) Credit ($) 01.01.2016…

Answered: On January 1, 2016, Prima Company…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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