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On May 1, Burns Corporation acquired 100 percent of the outstanding ownership shares of Quigley Corporation in exchange for $710,000 cash. At the acquisition date, Quigley's book and fair values were as follows: Cash Receivables Items Book Value $ 95,000 Fair Value $ 95,000 200,000 200,000 210,000 260,000 110,000 330,000 0 220,000 Inventory Land Building and equipment (net) Patented technology Total assets Accounts payable Long-term liabilities Common stock ($5 par value) Additional paid-in capital Retained earnings Total liabilities and stockholders' equity 130,000 270,000 $ 905,000 $ 120,000 510,000 210,000 90,000 (25,000) $ 905,000 $ 1,215,000 $ 120,000 510,000 0 0 0 0 Burns directs Quigley to seek additional financing for expansion through a new long-term debt Issue. Consequently, Quigley will issue a set of financial statements separate from that of its new parent to support its request for debt and accompanying regulatory filings. Quigley elects to apply pushdown accounting in order to show recent fair valuations for its assets. Required: Prepare a separate acquisition-date balance sheet for Quigley Corporation using pushdown accounting. Note: Input all amounts as positive values. Answer is not complete. QUIGLEY CORPORATION Balance Sheet May 1 Assets Liabilities and stockholders' Equity Cash S 95,000 Accounts payable $ 120,000 Receivables 200,000 Long-term liabilities 510,000 Inventory 260,000 Common stock 210,000 Land 110,000 Additional paid-in capital 90,000 Building and equipment (net) 330,000 APIC from pushdown accounting 350,000 Patented technology 220,000 Goodwill Total assets $ 1,215,000 Total liabilities and stockholders' equity $ 1,280,000

On May 1, Burns Corporation acquired 100 percent of the outstanding ownership shares of Quigley Corporation in exchange for $710,000 cash. At the acquisition date, Quigley's book and fair values were as follows: Cash Receivables Items Book Value $ 95,000 Fair Value $ 95,000 200,000 200,000 210,000 260,000 110,000 330,000 0 220,000 Inventory Land Building and equipment (net) Patented technology Total assets Accounts payable Long-term liabilities Common stock ($5 par value) Additional paid-in capital Retained earnings Total liabilities and stockholders' equity 130,000 270,000 $ 905,000 $ 120,000 510,000 210,000 90,000 (25,000) $ 905,000 $ 1,215,000 $ 120,000 510,000 0 0 0 0 Burns directs Quigley to seek additional financing for expansion through a new long-term debt Issue. Consequently, Quigley will issue a set of financial statements separate from that of its new parent to support its request for debt and accompanying regulatory filings. Quigley elects to apply pushdown accounting in order to show recent fair valuations for its assets. Required: Prepare a separate acquisition-date balance sheet for Quigley Corporation using pushdown accounting. Note: Input all amounts as positive values. Answer is not complete. QUIGLEY CORPORATION Balance Sheet May 1 Assets Liabilities and stockholders' Equity Cash S 95,000 Accounts payable $ 120,000 Receivables 200,000 Long-term liabilities 510,000 Inventory 260,000 Common stock 210,000 Land 110,000 Additional paid-in capital 90,000 Building and equipment (net) 330,000 APIC from pushdown accounting 350,000 Patented technology 220,000 Goodwill Total assets $ 1,215,000 Total liabilities and stockholders' equity $ 1,280,000

Auditing: A Risk Based-Approach (MindTap Course List)
Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter12: Auditing Long-lived Assets And Merger And Acquisition Activity
Section: Chapter Questions
Problem 37RQSC
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I cannot figure out the account of "Goodwill" or "APIC from Pushdown Accounting." I thought APIC should be $285,000, but it didn't work for some reason. And I didn't know we had goodwill, but we do, and I can't figure out how to get the correct answer. I tried $350,000 for APIC, but that also doesn't work, and I am at a loss of what to do next. Please explain as clearly as possible how to do Goodwill and the APIC from Pushdown Accounting. Thanks so much! :)
On May 1, Burns Corporation acquired 100 percent of the outstanding ownership shares of Quigley Corporation in exchange for $710,000 cash. At the acquisition date, Quigley's book and fair values were as follows: Cash Receivables Items Book Value $ 95,000 Fair Value $ 95,000 200,000 200,000 210,000 260,000 110,000 330,000 0 220,000 Inventory Land Building and equipment (net) Patented technology Total assets Accounts payable Long-term liabilities Common stock ($5 par value) Additional paid-in capital Retained earnings Total liabilities and stockholders' equity 130,000 270,000 $ 905,000 $ 120,000 510,000 210,000 90,000 (25,000) $ 905,000 $ 1,215,000 $ 120,000 510,000 0 0 0 0 Burns directs Quigley to seek additional financing for expansion through a new long-term debt Issue. Consequently, Quigley will issue a set of financial statements separate from that of its new parent to support its request for debt and accompanying regulatory filings. Quigley elects to apply pushdown accounting in order to show recent fair valuations for its assets. Required: Prepare a separate acquisition-date balance sheet for Quigley Corporation using pushdown accounting. Note: Input all amounts as positive values. Answer is not complete. QUIGLEY CORPORATION Balance Sheet May 1 Assets Liabilities and stockholders' Equity Cash S 95,000 Accounts payable $ 120,000 Receivables 200,000 Long-term liabilities 510,000 Inventory 260,000 Common stock 210,000 Land 110,000 Additional paid-in capital 90,000 Building and equipment (net) 330,000 APIC from pushdown accounting 350,000 Patented technology 220,000 Goodwill Total assets $ 1,215,000 Total liabilities and stockholders' equity $ 1,280,000
Transcribed Image Text:On May 1, Burns Corporation acquired 100 percent of the outstanding ownership shares of Quigley Corporation in exchange for $710,000 cash. At the acquisition date, Quigley's book and fair values were as follows: Cash Receivables Items Book Value $ 95,000 Fair Value $ 95,000 200,000 200,000 210,000 260,000 110,000 330,000 0 220,000 Inventory Land Building and equipment (net) Patented technology Total assets Accounts payable Long-term liabilities Common stock ($5 par value) Additional paid-in capital Retained earnings Total liabilities and stockholders' equity 130,000 270,000 $ 905,000 $ 120,000 510,000 210,000 90,000 (25,000) $ 905,000 $ 1,215,000 $ 120,000 510,000 0 0 0 0 Burns directs Quigley to seek additional financing for expansion through a new long-term debt Issue. Consequently, Quigley will issue a set of financial statements separate from that of its new parent to support its request for debt and accompanying regulatory filings. Quigley elects to apply pushdown accounting in order to show recent fair valuations for its assets. Required: Prepare a separate acquisition-date balance sheet for Quigley Corporation using pushdown accounting. Note: Input all amounts as positive values. Answer is not complete. QUIGLEY CORPORATION Balance Sheet May 1 Assets Liabilities and stockholders' Equity Cash S 95,000 Accounts payable $ 120,000 Receivables 200,000 Long-term liabilities 510,000 Inventory 260,000 Common stock 210,000 Land 110,000 Additional paid-in capital 90,000 Building and equipment (net) 330,000 APIC from pushdown accounting 350,000 Patented technology 220,000 Goodwill Total assets $ 1,215,000 Total liabilities and stockholders' equity $ 1,280,000
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