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Padre Sol Company Company Book Values Falr Values Book Values 12/31 12/31 12/31 Cash ... $ 400,000 $ 120,000 $ 120,000 Receivables. 220,000 410,000 600,000 600,000 220,000 (300,000) (90,000) (900,000) (660,000) 300,000 210,000 130,000 270,000 190,000 (120,000) (30,000) (510,000) 300,000 Inventory. Land... 260,000 110,000 330,000 Building and equipment (net) Franchise agreements.. Accounts payable . Accrued expenses 220,000 (120,000) (30,000) (510,000) Long-term liabilities. Common stock-$20 par value Common stock-$5 par value Additional paid-in capital.. Retained earnings, 1/1. (70,000) (390,000) (960,000) 920,000 (210,000) (90,000) (240,000) (330,000) 310,000 Revenues. Expenses Accounts Revenues Additional paid-in capital Expenses Retained earnings, 1/1 Retained earnings, 12/31 Inventory Land Buildings and equipment Franchise agreements Goodwill

Padre Sol Company Company Book Values Falr Values Book Values 12/31 12/31 12/31 Cash ... $ 400,000 $ 120,000 $ 120,000 Receivables. 220,000 410,000 600,000 600,000 220,000 (300,000) (90,000) (900,000) (660,000) 300,000 210,000 130,000 270,000 190,000 (120,000) (30,000) (510,000) 300,000 Inventory. Land... 260,000 110,000 330,000 Building and equipment (net) Franchise agreements.. Accounts payable . Accrued expenses 220,000 (120,000) (30,000) (510,000) Long-term liabilities. Common stock-$20 par value Common stock-$5 par value Additional paid-in capital.. Retained earnings, 1/1. (70,000) (390,000) (960,000) 920,000 (210,000) (90,000) (240,000) (330,000) 310,000 Revenues. Expenses Accounts Revenues Additional paid-in capital Expenses Retained earnings, 1/1 Retained earnings, 12/31 Inventory Land Buildings and equipment Franchise agreements Goodwill

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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Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included are fair values for Sol Company accounts.
On December 31, Padre acquires Sol’s outstanding stock by paying $360,000 in cash and issuing 10,000 shares of its own common stock with a fair value of $40 per share. Padre paid legal and accounting fees of $20,000 as well as $5,000 in stock issuance costs.
Determine the value that would be shown in Padre’s consolidated financial statements for each of the accounts listed.

Padre Sol Company Company Book Values Falr Values Book Values 12/31 12/31 12/31 Cash ... $ 400,000 $ 120,000 $ 120,000 Receivables. 220,000 410,000 600,000 600,000 220,000 (300,000) (90,000) (900,000) (660,000) 300,000 210,000 130,000 270,000 190,000 (120,000) (30,000) (510,000) 300,000 Inventory. Land... 260,000 110,000 330,000 Building and equipment (net) Franchise agreements.. Accounts payable . Accrued expenses 220,000 (120,000) (30,000) (510,000) Long-term liabilities. Common stock-$20 par value Common stock-$5 par value Additional paid-in capital.. Retained earnings, 1/1. (70,000) (390,000) (960,000) 920,000 (210,000) (90,000) (240,000) (330,000) 310,000 Revenues. Expenses
Transcribed Image Text:Padre Sol Company Company Book Values Falr Values Book Values 12/31 12/31 12/31 Cash ... $ 400,000 $ 120,000 $ 120,000 Receivables. 220,000 410,000 600,000 600,000 220,000 (300,000) (90,000) (900,000) (660,000) 300,000 210,000 130,000 270,000 190,000 (120,000) (30,000) (510,000) 300,000 Inventory. Land... 260,000 110,000 330,000 Building and equipment (net) Franchise agreements.. Accounts payable . Accrued expenses 220,000 (120,000) (30,000) (510,000) Long-term liabilities. Common stock-$20 par value Common stock-$5 par value Additional paid-in capital.. Retained earnings, 1/1. (70,000) (390,000) (960,000) 920,000 (210,000) (90,000) (240,000) (330,000) 310,000 Revenues. Expenses
Accounts Revenues Additional paid-in capital Expenses Retained earnings, 1/1 Retained earnings, 12/31 Inventory Land Buildings and equipment Franchise agreements Goodwill
Transcribed Image Text:Accounts Revenues Additional paid-in capital Expenses Retained earnings, 1/1 Retained earnings, 12/31 Inventory Land Buildings and equipment Franchise agreements Goodwill
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