Plint Corporation exchanged shares of its $2 par common stock for all of Sark Company's assets and liabilities in a planned merger. Immediately prior to the combination, Sark's assets and liabilities were as follows: Assets Cash and Equivalents Accounts Receivable Inventory Land Buildings Equipment Accumulated Depreciation Total Assets Liabilities and Equities Accounts Payable Short-Term Notes Payable Bonds Payable Common Stock ($10 par) Additional Paid-In Capital Retained Earnings Total Liabilities and Equities $ 41,000 73,000 144,000 200,000 1,520,000 638,000 (431,000) $2,185,000 $ 35,000 50,000 500,000 1,000,000 325,000 275,000 $ 2,185,000 Immediately prior to the combination, Plint reported $250,000 additional paid-in capital and $1,350,000 retained earnings. The fair values of Sark's assets and liabilities were equal to their book values on the date of combination except that Sark's buildings were worth $1,500,000 and its equipment was worth $300,000. Costs associated with planning and completing the business combination totaled $38,000, and stock issue costs totaled $22,000. The market value of Plint's stock at the date of combination was $4 per share. Required: Prepare the journal entries that would appear on Plint's books to record the combination if Plint issued 450,000 shares.
Plint Corporation exchanged shares of its $2 par common stock for all of Sark Company's assets and liabilities in a planned merger. Immediately prior to the combination, Sark's assets and liabilities were as follows: Assets Cash and Equivalents Accounts Receivable Inventory Land Buildings Equipment Accumulated Depreciation Total Assets Liabilities and Equities Accounts Payable Short-Term Notes Payable Bonds Payable Common Stock ($10 par) Additional Paid-In Capital Retained Earnings Total Liabilities and Equities $ 41,000 73,000 144,000 200,000 1,520,000 638,000 (431,000) $2,185,000 $ 35,000 50,000 500,000 1,000,000 325,000 275,000 $ 2,185,000 Immediately prior to the combination, Plint reported $250,000 additional paid-in capital and $1,350,000 retained earnings. The fair values of Sark's assets and liabilities were equal to their book values on the date of combination except that Sark's buildings were worth $1,500,000 and its equipment was worth $300,000. Costs associated with planning and completing the business combination totaled $38,000, and stock issue costs totaled $22,000. The market value of Plint's stock at the date of combination was $4 per share. Required: Prepare the journal entries that would appear on Plint's books to record the combination if Plint issued 450,000 shares.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Q1.
Plint Corporation exchanged shares of its $2 par common stock for all of Sark Company's assets and liabilities in a planned
merger. Immediately prior to the combination, Sark's assets and liabilities were as follows:
Assets
Cash and Equivalents
Accounts Receivable
Inventory
Land
Buildings
Equipment
Accumulated Depreciation
Total Assets
Liabilities and Equities
Accounts Payable
Short-Term Notes Payable
Bonds Payable
Common Stock ($10 par)
Additional Paid-In Capital
Retained Earnings
Total Liabilities and Equities
$ 41,000
73,000
144,000
200,000
1,520,000
638,000
(431,000)
$ 2,185,000
$ 35,000
50,000
500.000
1,000,000
325,000
275,000
$ 2,185,000
onal paid-in capita
Immediately prior to the combination, Plint reported $250,000
$1,350,000 retained earnings.
fair values of Sark's assets and liabilities were equal to their book values on the date of combination except that Sark's
buildings were worth $1,500,000 and its equipment was worth $300,000. Costs associated with planning and completing the
business combination totaled $38,000, and stock issue costs totaled $22,000. The market value of Plint's stock at the date of
combination was $4 per share.
Required:
Prepare the journal entries that would appear on Plint's books to record the combination if Plint issued 450,000 shares.
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