On January 1, 2021, KORU Co. issued shares of its $5 par value share capital to acquire all the net assets of PATRICH Company, which was liquidated immediately thereafter. Cost of issuing equity instruments amounting to $5,000 were incurred and paid by KORU Co., aside from the indirect acquisition costs amounting $3,000. The Statement of Financial Position for KORU Co. and the Statement of Financial for the combined company under the purchase method are presented below. KORU Co. Combined KORU Co. Combined Cash 70,000 100,000 Accounts Payable 40,000 60,000 Accounts Receivable 130,000 180,000 Bonds Payable 100,000 160,000 Inventory 100,000 220,000 Ordinary Share Capital 200,000 240,000 Land 100,000 175,000 Share Premium 60,000 420,000 Buildings and Equipment 400,000 550,000 Retained Earnings 250,000 247,000 Accumulated Depreciation 150,000 150,000 Goodwill - 52,000 Shortly after the above information was compiled, a fire destroyed the accounting records. What is the fair value of the shares issued by KORU Co. to acquire PATRICH?
On January 1, 2021, KORU Co. issued shares of its $5 par value share capital to acquire all the net assets of PATRICH Company, which was liquidated immediately thereafter. Cost of issuing equity instruments amounting to $5,000 were incurred and paid by KORU Co., aside from the indirect acquisition costs amounting $3,000. The Statement of Financial Position for KORU Co. and the Statement of Financial for the combined company under the purchase method are presented below. KORU Co. Combined KORU Co. Combined Cash 70,000 100,000 Accounts Payable 40,000 60,000 Accounts Receivable 130,000 180,000 Bonds Payable 100,000 160,000 Inventory 100,000 220,000 Ordinary Share Capital 200,000 240,000 Land 100,000 175,000 Share Premium 60,000 420,000 Buildings and Equipment 400,000 550,000 Retained Earnings 250,000 247,000 Accumulated Depreciation 150,000 150,000 Goodwill - 52,000 Shortly after the above information was compiled, a fire destroyed the accounting records. What is the fair value of the shares issued by KORU Co. to acquire PATRICH?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2021, KORU Co. issued shares of its $5 par value share capital to acquire all the net assets of PATRICH Company, which was liquidated immediately thereafter.
| KORU Co. | Combined | KORU Co. | Combined | ||
| Cash | 70,000 | 100,000 | Accounts Payable | 40,000 | 60,000 |
| 130,000 | 180,000 | Bonds Payable | 100,000 | 160,000 | |
| Inventory | 100,000 | 220,000 | Ordinary Share Capital | 200,000 | 240,000 |
| Land | 100,000 | 175,000 | Share Premium | 60,000 | 420,000 |
| Buildings and Equipment | 400,000 | 550,000 | 250,000 | 247,000 | |
| 150,000 | 150,000 | ||||
| - | 52,000 |
Shortly after the above information was compiled, a fire destroyed the accounting records. What is the fair value of the shares issued by KORU Co. to acquire PATRICH?
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