Homework Help is Here – Start Your Trial Now!
Business
Accounting
Problem 1-30 (Algo) Business Combination with Goodwill LO 1-5 Pancor Corporation paid cash of $175,000 to acquire Sink Company's net assets on February 1, 20X3. The balance sheet data for the wo companies and fair value information for Sink immediately before the business combination were: Assets Cash Balance Sheet Item Accounts Receivable. Inventory Patents Buildings and Equipment Less: Accumulated Depreciation Total Assets Liabilities and Equities Accounts Payable Notes Payable Common Stock: $10 par value $8 par value Additional Paid-In Capital Retained Earnings Total Liabilities and Equities Pancor Corporation Book Value $243,000 157,000 178,000 87,000 397,000 (182,000) $ 880,000 $82,000 137,000 193,000 159,000 309,000 $ 880,000 Sink Company Book Value $ 13,000 31,000 32,000 55,000 323,000 (192,000) $ 262,000 $ 60,000 127,000 12,000 10,000 53,000 $ 262,000 Fair Value $ 13,000 31,000 46,000 56,000 141,000 $ 287,000 $ 60,000 127,000 Required: a. Prepare the journal entry recorded by Pancor Corporation when it acquired Sink's net assets. b. Prepare a balance sheet for Pancor immediately following the acquisition. c. Prepare the journal entry to be recorded by Pancor if it acquires all of Sink's common stock for $175,000.

Problem 1-30 (Algo) Business Combination with Goodwill LO 1-5 Pancor Corporation paid cash of $175,000 to acquire Sink Company's net assets on February 1, 20X3. The balance sheet data for the wo companies and fair value information for Sink immediately before the business combination were: Assets Cash Balance Sheet Item Accounts Receivable. Inventory Patents Buildings and Equipment Less: Accumulated Depreciation Total Assets Liabilities and Equities Accounts Payable Notes Payable Common Stock: $10 par value $8 par value Additional Paid-In Capital Retained Earnings Total Liabilities and Equities Pancor Corporation Book Value $243,000 157,000 178,000 87,000 397,000 (182,000) $ 880,000 $82,000 137,000 193,000 159,000 309,000 $ 880,000 Sink Company Book Value $ 13,000 31,000 32,000 55,000 323,000 (192,000) $ 262,000 $ 60,000 127,000 12,000 10,000 53,000 $ 262,000 Fair Value $ 13,000 31,000 46,000 56,000 141,000 $ 287,000 $ 60,000 127,000 Required: a. Prepare the journal entry recorded by Pancor Corporation when it acquired Sink's net assets. b. Prepare a balance sheet for Pancor immediately following the acquisition. c. Prepare the journal entry to be recorded by Pancor if it acquires all of Sink's common stock for $175,000.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

2

Problem 1-30 (Algo) Business Combination with Goodwill LO 1-5 Pancor Corporation paid cash of $175,000 to acquire Sink Company's net assets on February 1, 20X3. The balance sheet data for the two companies and fair value information for Sink immediately before the business combination were: Assets Cash Balance Sheet Item Accounts Receivable Inventory Patents Buildings and Equipment Less: Accumulated Depreciation Total Assets Liabilities and Equities Accounts Payable Notes Payable Common Stock: $10 par value $8 par value Additional Paid-In Capital Retained Earnings Total Liabilities and Equities Pancor Corporation Book Value $ 243,000 157,000 178,000 87,000 397,000 (182,000) $ 880,000 $ 82,000 137,000 193,000 159,000 309,000 $ 880,000 Sink Company Book Value $ 13,000 31,000 32,000 55,000 323,000 (192,000) $ 262,000 $ 60,000 127,000 12,000 10,000 53,000 $ 262,000 Fair Value $ 13,000 31,000 46,000 56,000 141,000 $ 287,000 $ 60,000 127,000 Required: a. Prepare the journal entry recorded by Pancor Corporation when it acquired Sink's net assets. b. Prepare a balance sheet for Pancor immediately following the acquisition. c. Prepare the journal entry to be recorded by Pancor if it acquires all of Sink's common stock for $175,000.
Transcribed Image Text:Problem 1-30 (Algo) Business Combination with Goodwill LO 1-5 Pancor Corporation paid cash of $175,000 to acquire Sink Company's net assets on February 1, 20X3. The balance sheet data for the two companies and fair value information for Sink immediately before the business combination were: Assets Cash Balance Sheet Item Accounts Receivable Inventory Patents Buildings and Equipment Less: Accumulated Depreciation Total Assets Liabilities and Equities Accounts Payable Notes Payable Common Stock: $10 par value $8 par value Additional Paid-In Capital Retained Earnings Total Liabilities and Equities Pancor Corporation Book Value $ 243,000 157,000 178,000 87,000 397,000 (182,000) $ 880,000 $ 82,000 137,000 193,000 159,000 309,000 $ 880,000 Sink Company Book Value $ 13,000 31,000 32,000 55,000 323,000 (192,000) $ 262,000 $ 60,000 127,000 12,000 10,000 53,000 $ 262,000 Fair Value $ 13,000 31,000 46,000 56,000 141,000 $ 287,000 $ 60,000 127,000 Required: a. Prepare the journal entry recorded by Pancor Corporation when it acquired Sink's net assets. b. Prepare a balance sheet for Pancor immediately following the acquisition. c. Prepare the journal entry to be recorded by Pancor if it acquires all of Sink's common stock for $175,000.
Expert Solution
steps

Step by step

Solved in 6 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Segment Reporting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS