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Potluck Corp. acquired all of the stock of Sauers Corp. on June 30, 2022, in an acquisition reported as a stock acquisition. Sauers' trial balance at the date of acquisition, along with the fair values of its assets and liabilities, are: Tangible assets Intangible assets Liabilities Capital stock Retained earnings Accumulated other comprehensive income Total Fair Value Dr (Cr) $15,000,000 9,000,000 54,000,000 Book Value Dr (Cr) $36,000,000 (33,600,000) (33,000,000) (6,000,000) (5,340,000) (60,000) $0 Potluck pays $54 million in cash and issues 900,000 shares of stock to the former owners of Sauers. Potluck's stock has a par value of $0.01 /share. The market price of the shares at the date of acquisition, $21 /share, is used to value the shares issued. Registration fees for the stock are $300,000 and legal and consulting fees connected with the acquisition are $360,000, both paid in cash. Required Note: Enter all zeros with your numerical answers, do not abbreviate your answers in thousands or in millions. a. Prepare the journal entry Potluck made to record the stock acquisition on its own books on June 30, 2022.

Potluck Corp. acquired all of the stock of Sauers Corp. on June 30, 2022, in an acquisition reported as a stock acquisition. Sauers' trial balance at the date of acquisition, along with the fair values of its assets and liabilities, are: Tangible assets Intangible assets Liabilities Capital stock Retained earnings Accumulated other comprehensive income Total Fair Value Dr (Cr) $15,000,000 9,000,000 54,000,000 Book Value Dr (Cr) $36,000,000 (33,600,000) (33,000,000) (6,000,000) (5,340,000) (60,000) $0 Potluck pays $54 million in cash and issues 900,000 shares of stock to the former owners of Sauers. Potluck's stock has a par value of $0.01 /share. The market price of the shares at the date of acquisition, $21 /share, is used to value the shares issued. Registration fees for the stock are $300,000 and legal and consulting fees connected with the acquisition are $360,000, both paid in cash. Required Note: Enter all zeros with your numerical answers, do not abbreviate your answers in thousands or in millions. a. Prepare the journal entry Potluck made to record the stock acquisition on its own books on June 30, 2022.

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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To record the acquisition 0 > (R) Debit 0 0 0 0 0 Credit b. Prepare working paper eliminating entries (E) and (R) to combine the accounts of Potluck and Sauers at June 30, 2022. Debit Credit 0 0 0 0 0 To revalue Sauer's assets and liabilities to fair value To eliminate Sauer's equity accounts against the investment account 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Transcribed Image Text:To record the acquisition 0 > (R) Debit 0 0 0 0 0 Credit b. Prepare working paper eliminating entries (E) and (R) to combine the accounts of Potluck and Sauers at June 30, 2022. Debit Credit 0 0 0 0 0 To revalue Sauer's assets and liabilities to fair value To eliminate Sauer's equity accounts against the investment account 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Potluck Corp. acquired all of the stock of Sauers Corp. on June 30, 2022, in an acquisition reported as a stock acquisition. Sauers' trial balance at the date of acquisition, along with the fair values of its assets and liabilities, are: Tangible assets Intangible assets Liabilities Capital stock Retained earnings Accumulated other comprehensive income Total Book Value Dr (Cr) $36,000,000 Fair Value Dr (Cr) $15,000,000 9,000,000 54,000,000 (33,600,000) (33,000,000) (6,000,000) (5,340,000) (60,000) $0 Potluck pays $54 million in cash and issues 900,000 shares of stock to the former owners of Sauers. Potluck's stock has a par value of $0.01 /share. The market price of the shares at the date of acquisition, $21 /share, is used to value the shares issued. Registration fees for the stock are $300,000 and legal and consulting fees connected with the acquisition are $360,000, both paid in cash. Required Note: Enter all zeros with your numerical answers, do not abbreviate your answers in thousands or in millions. a. Prepare the journal entry Potluck made to record the stock acquisition on its own books on June 30, 2022.
Transcribed Image Text:Potluck Corp. acquired all of the stock of Sauers Corp. on June 30, 2022, in an acquisition reported as a stock acquisition. Sauers' trial balance at the date of acquisition, along with the fair values of its assets and liabilities, are: Tangible assets Intangible assets Liabilities Capital stock Retained earnings Accumulated other comprehensive income Total Book Value Dr (Cr) $36,000,000 Fair Value Dr (Cr) $15,000,000 9,000,000 54,000,000 (33,600,000) (33,000,000) (6,000,000) (5,340,000) (60,000) $0 Potluck pays $54 million in cash and issues 900,000 shares of stock to the former owners of Sauers. Potluck's stock has a par value of $0.01 /share. The market price of the shares at the date of acquisition, $21 /share, is used to value the shares issued. Registration fees for the stock are $300,000 and legal and consulting fees connected with the acquisition are $360,000, both paid in cash. Required Note: Enter all zeros with your numerical answers, do not abbreviate your answers in thousands or in millions. a. Prepare the journal entry Potluck made to record the stock acquisition on its own books on June 30, 2022.
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