PR Company pays $25,000 in cash and issues no-par stock with a fair value of $40,000 to acquire all of SX Corporation's net assets. SX's balance sheet at thedate of acquisition is as follows:Current assetsProperty, plant & equipment, netIdentifiable intangible assetsTotal assetsCurrent liabilitiesLong-term debtCapital stockRetained earningSX CorporationBook value Fair value$5,000 $8,00013,0004,000$22,000Accumulated other comprehensive incomeTreasury stockTotal abilities & equity$4,60014,5004,0005.500(1,000)(R600)$22,0009,00013,000$5,60013,800PR's consultants find these items that are not reported on SXS balance sheet R's consultants find these items that are not reported on SX's balance sheet:Potential contracts with new customersAdvanced production technologyFuture cost savingsCustomer listsFair value$7,5002,500Os 2.500O$ 5,000O$12,50020$13.5001,0002,500Outside consultants are paid $300 in cash, and registration fees to issue PR's new stock are $500. The question below relates to the entry or entries PR makesto record the acquisition on its books.PR recognizes previously unrecorded intangibles ofeUHAM

Intangible Assets: These are the assets which has no physical substance, i.e., which cannot be…

Outside consultants are paid $300 in cash, and registration fees to issue PR's new stock are $500. The question below relates to the entry or entries PR makes to record the acquisition on its books. PR recognizes previously unrecorded intangibles of O$ 2,500 O$ 5,000 O$12.500 0$13,500 G

Outside consultants are paid $300 in cash, and registration fees to issue PR's new stock are $500. The question below relates to the entry or entries PR makes to record the acquisition on its books. PR recognizes previously unrecorded intangibles of O$ 2,500 O$ 5,000 O$12.500 0$13,500 G

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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Question

PR Company pays $25,000 in cash and issues no-par stock with a fair value of $40,000 to acquire all of SX Corporation's net assets. SX's balance sheet at the
date of acquisition is as follows:
Current assets
Property, plant & equipment, net
Identifiable intangible assets
Total assets
Current liabilities
Long-term debt
Capital stock
Retained earning
SX Corporation
Book value Fair value
$5,000 $8,000
13,000
4,000
$22,000
Accumulated other comprehensive income
Treasury stock
Total abilities & equity
$4,600
14,500
4,000
5.500
(1,000)
(R600)
$22,000
9,000
13,000
$5,600
13,800
PR's consultants find these items that are not reported on SXS balance sheet

R's consultants find these items that are not reported on SX's balance sheet:
Potential contracts with new customers
Advanced production technology
Future cost savings
Customer lists
Fair value
$7,500
2,500
Os 2.500
O$ 5,000
O$12,500
20$13.500
1,000
2,500
Outside consultants are paid $300 in cash, and registration fees to issue PR's new stock are $500. The question below relates to the entry or entries PR makes
to record the acquisition on its books.
PR recognizes previously unrecorded intangibles of
e
UHAM

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