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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 Items Receivables 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 Book Value $ 95,000 Fair Value $ 95,000 200,000 200,000 210,000 260,000 130,000 270,000 110,000 330,000 Ө 220,000 $ 905,000 $ 120,000 510,000 210,000 90,000 (25,000) $ 905,000 $ 1,215,000 $ 120,000 510,000 0 0 0 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 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 Items Receivables 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 Book Value $ 95,000 Fair Value $ 95,000 200,000 200,000 210,000 260,000 130,000 270,000 110,000 330,000 Ө 220,000 $ 905,000 $ 120,000 510,000 210,000 90,000 (25,000) $ 905,000 $ 1,215,000 $ 120,000 510,000 0 0 0 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 Total assets $ 1,215,000 Total liabilities and stockholders' equity $ 1,280,000

FINANCIAL ACCOUNTING
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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I don't quite understand APIC pushdown accounting. I know you subtract: "Fair Value - Book Value = Net Adjustment to APIC" of assets, but the amount I added up is too much, and now both sides are unequal. What do I do? Please clearly explain, in detail. Thank you. :)

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 Items Receivables 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 Book Value $ 95,000 Fair Value $ 95,000 200,000 200,000 210,000 260,000 130,000 270,000 110,000 330,000 Ө 220,000 $ 905,000 $ 120,000 510,000 210,000 90,000 (25,000) $ 905,000 $ 1,215,000 $ 120,000 510,000 0 0 0 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 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 Items Receivables 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 Book Value $ 95,000 Fair Value $ 95,000 200,000 200,000 210,000 260,000 130,000 270,000 110,000 330,000 Ө 220,000 $ 905,000 $ 120,000 510,000 210,000 90,000 (25,000) $ 905,000 $ 1,215,000 $ 120,000 510,000 0 0 0 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 Total assets $ 1,215,000 Total liabilities and stockholders' equity $ 1,280,000
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