QUESTIONS:1. Condensed balance sheets for P Company and s Company onJanuary 1,2017areasfollows:$ 290,000720,000$135,000225,000Current AssetsFixed Assets (net)Total Assets$1,010,000$360,000150,000560,000Paid-in-Capital in excess of Par 200,000100,000$ 55,000160,00085,00060,000Total Liabilities$Common Stock, $10 par valueRetained EarningsTotal Equities$1,010,000$360,000On January 1, 2017 the stockholders of P and S agreed tocorporation, L Company, would be formed to consolidate P and S.shares of its $20 par value common stock for the net assets of P and S. On the date ofconsolidation, the fair values of P's and S's current assets and liabilities were equala consolidation whereby aL Company issued 50,000newto their book values.The fair value of fixed assets for each company was: P, $850,000;s, $240,000. An investment banking house estimated that the fair value of L Company'scommon stock was $35 per share.$10,000 in stock issue costs.P will incur $30,000 of direct acquisition costs andRequired:Prepare the journal entry to record the consolidation on the books of L Companyassuming that the consolidation is accounted for as aacquisition.

What is meant by Acquisition? The acquisition represents the absorption of existing business by…

QUESTIONS: 1. Condensed balance sheets for P Company and S Company on January 1, 2017 are as follows: P $ 290,000 720,000 $135,000 225,000 Current Assets Fixed Assets (net) Total Assets $1,010,000 $360,000 $ 150,000 560,000 $ 55,000 160,000 85,000 60,000 Total Liabilities Common Stock, $10 par value Paid-in-Capital in excess of Par 200,000 Retained Earnings 100,000

QUESTIONS: 1. Condensed balance sheets for P Company and S Company on January 1, 2017 are as follows: P $ 290,000 720,000 $135,000 225,000 Current Assets Fixed Assets (net) Total Assets $1,010,000 $360,000 $ 150,000 560,000 $ 55,000 160,000 85,000 60,000 Total Liabilities Common Stock, $10 par value Paid-in-Capital in excess of Par 200,000 Retained Earnings 100,000

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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