Pace Corporation acquired 100 percent of Spin Company's common stock on January 1, 20X9. Balance sheet data for the two companies immediately following the acquisition follows: Item Pace Corporation Spin Company Cash $ 30,000 $ 25,000 Accounts Receivable 80,000 40,000 Inventory 150,000 55,000 Land 65,000 40,000 Buildings and Equipment 260,000 160,000 Less: Accumulated Depreciation (120,000 ) (50,000 ) Investment in Spin Company Stock 150,000 Total Assets $ 615,000 $ 270,000 Accounts Payable $45,000 $33,000 Taxes Payable 20,000 8,000 Bonds Payable 200,000 100,000 Common Stock 50,000 20,000 Retained Earnings 300,000 109,000 Total Liabilities and Stockholders' Equity $ 615,000 $ 270,000 At the date of the business combination, the book values of Spin's net assets and liabilities approximated fair value except for inventory, which had a fair value of $60,000, and land, which had a fair value of $50,000. The fair value of land for Pace Corporation was estimated at $80,000 immediately prior to the acquisition. Based on the preceding information, what amount of total stockholders' equity will be reported in the consolidated balance sheet prepared immediately after the business combination? $479,000 $350,000 $300,000 $315,000
Pace Corporation acquired 100 percent of Spin Company's common stock on January 1, 20X9. Balance sheet data for the two companies immediately following the acquisition follows: Item Pace Corporation Spin Company Cash $ 30,000 $ 25,000 Accounts Receivable 80,000 40,000 Inventory 150,000 55,000 Land 65,000 40,000 Buildings and Equipment 260,000 160,000 Less: Accumulated Depreciation (120,000 ) (50,000 ) Investment in Spin Company Stock 150,000 Total Assets $ 615,000 $ 270,000 Accounts Payable $45,000 $33,000 Taxes Payable 20,000 8,000 Bonds Payable 200,000 100,000 Common Stock 50,000 20,000 Retained Earnings 300,000 109,000 Total Liabilities and Stockholders' Equity $ 615,000 $ 270,000 At the date of the business combination, the book values of Spin's net assets and liabilities approximated fair value except for inventory, which had a fair value of $60,000, and land, which had a fair value of $50,000. The fair value of land for Pace Corporation was estimated at $80,000 immediately prior to the acquisition. Based on the preceding information, what amount of total stockholders' equity will be reported in the consolidated balance sheet prepared immediately after the business combination? $479,000 $350,000 $300,000 $315,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Pace Corporation acquired 100 percent of Spin Company's common stock on January 1, 20X9.
| Item | Pace Corporation |
Spin Company |
||||||||
| Cash | $ | 30,000 | $ | 25,000 | ||||||
| 80,000 | 40,000 | |||||||||
| Inventory | 150,000 | 55,000 | ||||||||
| Land | 65,000 | 40,000 | ||||||||
| Buildings and Equipment | 260,000 | 160,000 | ||||||||
| Less: |
(120,000 | ) | (50,000 | ) | ||||||
| Investment in Spin Company Stock | 150,000 | |||||||||
| Total Assets | $ | 615,000 | $ | 270,000 | ||||||
| Accounts Payable | $45,000 | $33,000 | ||||||||
| Taxes Payable | 20,000 | 8,000 | ||||||||
| Bonds Payable | 200,000 | 100,000 | ||||||||
| Common Stock | 50,000 | 20,000 | ||||||||
| 300,000 | 109,000 | |||||||||
| Total Liabilities and |
$ | 615,000 | $ | 270,000 |
At the date of the business combination, the book values of Spin's net assets and liabilities approximated fair value except for inventory, which had a fair value of $60,000, and land, which had a fair value of $50,000. The fair value of land for Pace Corporation was estimated at $80,000 immediately prior to the acquisition.
Based on the preceding information, what amount of total stockholders' equity will be reported in the consolidated balance sheet prepared immediately after the business combination?
|
$479,000 |
||
|
$350,000 |
||
|
$300,000 |
||
|
$315,000 |
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