Pamrod Manufacturing acquired all the assets and liabilities of Stafford Industries on January 1, 20X2, in exchange for 4,200 shares of Pamrod's $20 par value common stock. Balance sheet data for both companies just before the merger are given as follows: Balance Sheet Items Assets Cash Accounts Receivable Inventory Land Buildings and Equipment Less: Accumulated Depreciation Total Assets Liabilities and Equities Accounts Payable Bonds Payable Common Stock: $20 par value $5 par value Additional Paid-In Capital Retained Earnings Total Liabilities and Equities $ S S S Pamrod Manufacturing Book Value Fair Value 88,000 103,000 200,000 59,000 610,000 (234,000) 826,000 54,000 305,000 194,000 35,000 238,000 826,000 $ $ $ 88,000 $ 103,000 393,000 91,000 557,000 1,232,000 $ 54,000 $ 315,000 $ Stafford Industries Book Value 24,000 52,000 110,000 $ 6,000 S 157,000 87,000 18,000 244,000 512,000 49,000 418,000 (141,000) 512,000 $ 594,000 Fair Value Pamrod shares were selling for $140 on the date of acquisition. Required: a. Prepare a Journal entry to record the acquisition in Pamrod's books. b. Prepare a balance sheet for the combined enterprise immediately following the business combination. 24,000 52,000 155,000 21,000 342,000 6,000 145,000
Pamrod Manufacturing acquired all the assets and liabilities of Stafford Industries on January 1, 20X2, in exchange for 4,200 shares of Pamrod's $20 par value common stock. Balance sheet data for both companies just before the merger are given as follows: Balance Sheet Items Assets Cash Accounts Receivable Inventory Land Buildings and Equipment Less: Accumulated Depreciation Total Assets Liabilities and Equities Accounts Payable Bonds Payable Common Stock: $20 par value $5 par value Additional Paid-In Capital Retained Earnings Total Liabilities and Equities $ S S S Pamrod Manufacturing Book Value Fair Value 88,000 103,000 200,000 59,000 610,000 (234,000) 826,000 54,000 305,000 194,000 35,000 238,000 826,000 $ $ $ 88,000 $ 103,000 393,000 91,000 557,000 1,232,000 $ 54,000 $ 315,000 $ Stafford Industries Book Value 24,000 52,000 110,000 $ 6,000 S 157,000 87,000 18,000 244,000 512,000 49,000 418,000 (141,000) 512,000 $ 594,000 Fair Value Pamrod shares were selling for $140 on the date of acquisition. Required: a. Prepare a Journal entry to record the acquisition in Pamrod's books. b. Prepare a balance sheet for the combined enterprise immediately following the business combination. 24,000 52,000 155,000 21,000 342,000 6,000 145,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please answer all parts completely and correctly with explanation computation formula steps answer in text no copy paste show explanation and computation clearly for numbers provide narrations also
Transcribed Image Text:Pamrod Manufacturing acquired all the assets and liabilities of Stafford Industries on January 1, 20X2, in exchange for 4,200
shares of Pamrod's $20 par value common stock. Balance sheet data for both companies just before the merger are given as
follows:
Balance Sheet Items
Assets
Cash
Accounts Receivable
Inventory
Land
Buildings and Equipment
Less: Accumulated Depreciation
Total Assets
Liabilities and Equities
Accounts Payable
Bonds Payable
Common Stock:
$20 par value
$5 par value
Additional Paid-In Capital
Retained Earnings
Total Liabilities and Equities
S
S
$
S
Pamrod Manufacturing
Book Value
$
88,000
103,000
200,000
59,000
610,000
(234,000)
826,000 $
54,000 $
305,000
194,000
35,000
238,000
826,000
Fair Value
88,000 $
103,000
393,000
91,000
557,000
1,232,000 S
54,000 $
315,000
S
Stafford Industries
Book Value
24,000
52,000
110,000
49,000
418,000
(141,000)
512,000 S
$
6,000
157,000
87,000
18,000
244,000
512,000
S
Fair Value
Pamrod shares were selling for $140 on the date of acquisition.
Required:
a. Prepare a Journal entry to record the acquisition in Pamrod's books.
b. Prepare a balance sheet for the combined enterprise immediately following the business combination.
24,000
52,000
155,000
21,000
342,000
594,000
6,000
145,000
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