ONLY PART E AND F AVOID IMAGES IN ANSWER
Chapter3: Analyzing And Recording Transactions
Section: Chapter Questions
Problem 11MC: Also known as the historical cost principle, ________ states that everything the company owns or...
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ONLY PART E AND F
AVOID IMAGES IN ANSWER
![Required:
a. Prepare the journal entry on Pittsburg's books to record the acquisition of the net assets of Atlanta.
b. Prepare a balance sheet for Pittsburg immediately after the acquisition of the net assets.
C.
Prepare the journal entry on Atlanta's books to record the sale of the net assets to Pittsburg.
d. Prepare a balance sheet for Atlanta immediately after the sale of their net assets.
e.
Prepare the journal entry on Pittsburg's books to record the acquisition assuming Pittsburg purchased
100% of Atlanta's stock for the 25,000 shares of Pittsburg's stock.
f.
If Pittsburg purchased 100% of Atlanta's stock in the acquisition, what journal entry would be made by
Atlanta?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3c55551a-4a12-4719-b57f-3c834266b890%2F15b47332-599e-45f2-a421-09d48892d7ea%2Fwj78g0d_processed.png&w=3840&q=75)
Transcribed Image Text:Required:
a. Prepare the journal entry on Pittsburg's books to record the acquisition of the net assets of Atlanta.
b. Prepare a balance sheet for Pittsburg immediately after the acquisition of the net assets.
C.
Prepare the journal entry on Atlanta's books to record the sale of the net assets to Pittsburg.
d. Prepare a balance sheet for Atlanta immediately after the sale of their net assets.
e.
Prepare the journal entry on Pittsburg's books to record the acquisition assuming Pittsburg purchased
100% of Atlanta's stock for the 25,000 shares of Pittsburg's stock.
f.
If Pittsburg purchased 100% of Atlanta's stock in the acquisition, what journal entry would be made by
Atlanta?
![The balance sheets of Pittsburg Company and Atlanta Company as of January 1, 2020, are shown below. On that
date Pittsburg purchased the net assets of Atlanta. Pittsburg Company issued 25,000 shares of their common stock
for the net assets of Atlanta Company. The market value of Pittsburg's shares was $48 per share, the par value is
$16 per share. The fair values of Atlanta Company's assets and liabilities are equal to their book values with the
exception of buildings and equipment, which has an estimated fair value of $720,000.
Cash
Accounts receivable
Inventory
Buildings and equipment, net
Total assets
Liabilities
Common stock
APIC
Retained earnings
Total liabilities and equity
Pittsburg
$ 520,000
320,000
1,975,000
3,275,000
$6,090,000
$1,935,000
3,557,000
300,000
298,000
$6,090,000
Atlanta
$ 200,000
240,000
240,000
800,000
$1,480,000
$ 320,000
800,000
360,000
$1,480,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3c55551a-4a12-4719-b57f-3c834266b890%2F15b47332-599e-45f2-a421-09d48892d7ea%2F7ai2x4c_processed.png&w=3840&q=75)
Transcribed Image Text:The balance sheets of Pittsburg Company and Atlanta Company as of January 1, 2020, are shown below. On that
date Pittsburg purchased the net assets of Atlanta. Pittsburg Company issued 25,000 shares of their common stock
for the net assets of Atlanta Company. The market value of Pittsburg's shares was $48 per share, the par value is
$16 per share. The fair values of Atlanta Company's assets and liabilities are equal to their book values with the
exception of buildings and equipment, which has an estimated fair value of $720,000.
Cash
Accounts receivable
Inventory
Buildings and equipment, net
Total assets
Liabilities
Common stock
APIC
Retained earnings
Total liabilities and equity
Pittsburg
$ 520,000
320,000
1,975,000
3,275,000
$6,090,000
$1,935,000
3,557,000
300,000
298,000
$6,090,000
Atlanta
$ 200,000
240,000
240,000
800,000
$1,480,000
$ 320,000
800,000
360,000
$1,480,000
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