Pitan Company pays $2,000,000 in cash to acquire Sictory Company’s assets and liabilities (a merger). Book and fair values of Sictory’s assets and liabilities appear below. Book Value Fair Value Current assets $ 300,000 $ 200,000 Held To Maturity investments 100,000 120,000 Buildings, net 1,200,000 1,000,000 Equipment, net 2,000,000 500,000 Identifiable intangible assets 0 1,000,000 Liabilities 500,000 520,000 Using a T-account template: Prepare the entry to recognize Pitan’s acquisition of Sictory.
Pitan Company pays $2,000,000 in cash to acquire Sictory Company’s assets and liabilities (a merger). Book and fair values of Sictory’s assets and liabilities appear below. Book Value Fair Value Current assets $ 300,000 $ 200,000 Held To Maturity investments 100,000 120,000 Buildings, net 1,200,000 1,000,000 Equipment, net 2,000,000 500,000 Identifiable intangible assets 0 1,000,000 Liabilities 500,000 520,000 Using a T-account template: Prepare the entry to recognize Pitan’s acquisition of Sictory.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Pitan Company pays $2,000,000 in cash to acquire Sictory Company’s assets and liabilities (a merger). Book and fair values of Sictory’s assets and liabilities appear below.
|
|
Book Value |
Fair Value |
|
Current assets |
$ 300,000 |
$ 200,000 |
|
Held To Maturity investments |
100,000 |
120,000 |
|
Buildings, net |
1,200,000 |
1,000,000 |
|
Equipment, net |
2,000,000 |
500,000 |
|
Identifiable intangible assets |
0 |
1,000,000 |
|
Liabilities |
500,000 |
520,000 |
Using a T-account template:
- Prepare the entry to recognize Pitan’s acquisition of Sictory.
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