On May 31,2018, Fedex Company acquired Aramex Company's outstanding stock by paying $400,000 cash and issuing 10,000 shares of its own $30 par value common stock, when the market price was $32 per share. Fedex paid legal and accounting fees amounting to S35,000 in addition to stock issuance costs of $8,000. Aramex is dissolved on the date of the acquisition. Balance sheet information for Fedex and Aramex immediately preceding the acquisition is shown below, including fair values for Aramex's assets and liabilities. Fedex Aramex Eair Value $140,000 Aramex Book Value Book Value Cash 490,000 $140,000 Accounts Receivable 560,000 280,000 280,000 Inventory 520,000 200,000 260,000 Land 460,000 150,000 140,000 Plant Assets - Net 980,000 325,000 355,000 Construction Permits 380,000 170,000 190,000 Accounts Payable Other accrued expenses Notes Payable Common Stock ($30 par) Common Stock ($20 par) (460,000) (140,000) (140,000) (160,000) (800,000) (45,000) (45,000) (460,000) (460,000) (960,000) (200,000) (192,000) (818,000) Additional P.I.C (80,000) (340,000) Retained Earnings Required: Determine the consolidated balances which Fedex would present on their consolidated balance sheet for the following accounts. Cash Inventory Construction Permits Goodwill Notes Payable Common Stock Additional Paid in Capital Retained Earnings
On May 31,2018, Fedex Company acquired Aramex Company's outstanding stock by paying $400,000 cash and issuing 10,000 shares of its own $30 par value common stock, when the market price was $32 per share. Fedex paid legal and accounting fees amounting to S35,000 in addition to stock issuance costs of $8,000. Aramex is dissolved on the date of the acquisition. Balance sheet information for Fedex and Aramex immediately preceding the acquisition is shown below, including fair values for Aramex's assets and liabilities. Fedex Aramex Eair Value $140,000 Aramex Book Value Book Value Cash 490,000 $140,000 Accounts Receivable 560,000 280,000 280,000 Inventory 520,000 200,000 260,000 Land 460,000 150,000 140,000 Plant Assets - Net 980,000 325,000 355,000 Construction Permits 380,000 170,000 190,000 Accounts Payable Other accrued expenses Notes Payable Common Stock ($30 par) Common Stock ($20 par) (460,000) (140,000) (140,000) (160,000) (800,000) (45,000) (45,000) (460,000) (460,000) (960,000) (200,000) (192,000) (818,000) Additional P.I.C (80,000) (340,000) Retained Earnings Required: Determine the consolidated balances which Fedex would present on their consolidated balance sheet for the following accounts. Cash Inventory Construction Permits Goodwill Notes Payable Common Stock Additional Paid in Capital Retained Earnings
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On May 31,2018, Fedex Company acquired Aramex Company's outstanding stock by paying
$400,000 cash and issuing 10,000 shares of its own $30 par value common stock, when the market price
was $32 per share. Fedex paid legal and accounting fees amounting to S35,000 in addition to stock issuance
costs of $8,000. Aramex is dissolved on the date of the acquisition. Balance sheet information for Fedex and
Aramex immediately preceding the acquisition is shown below, including fair values for Aramex's assets
and liabilities.
Fedex
Aramex
Aramex
Book Value
Book Value
Fair Value
Cash
490,000
$140,000
$140,000
Accounts Receivable
560,000
280,000
280,000
Inventory
520,000
200,000
260,000
Land
460,000
150,000
140,000
Plant Assets - Net
980,000
325,000
355,000
Construction Permits
380,000
170,000
190,000
Accounts Payable
Other accrued expenses
Notes Payable
Common Stock ($30 par)
Common Stock ($20 par)
(460,000)
(160,000)
(800,000)
(960,000)
(140,000)
(140,000)
(45,000)
(45,000)
(460,000)
(460,000)
(200,000)
(80,000)
Additional P.I.C
(192,000)
Retained Earnings
(818,000)
(340,000)
Required: Determine the consolidated balances which Fedex would present on their consolidated balance
sheet for the following accounts.
Cash
Inventory
Construction Permits
Goodwill
Notes Payable
Common Stock
Additional Paid in Capital
Retained Earnings
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