required:1-prepare journal entries for pam corp to record its acquisition of sun corp, including all allocations to individual asset and liability accounts.2- prepare a balance sheet for pam corp on 1/2/2016 after the acquisition and disolution of Sun. ### P1-5 Journal Entries and Balance Sheet for an AcquisitionPam Corporation acquired Sun Corporation’s voting common stock costing $10,000,000 on January 2, 2016, resulting in Sun’s dissolution. The purchase involved 200,000 shares of Pam's common stock, valued at $8,000,000, plus an additional $2,000,000 in cash. Pam also incurred $200,000 for registration and issuing of the shares and $400,000 in other acquisition-related expenses. Below is the balance sheet information for both companies just before the acquisition (in thousands):#### Balance Sheet Summary| **Description** | **Pam Book Value** | **Sun Book Value** | **Sun Fair Value** ||--------------------------|-------------------:|-------------------:|--------------------:|| **Assets** | | | || Cash | $12,000 | $960 | $960 || Accounts receivable—net | $5,200 | $1,440 | $1,440 || Notes receivable—net | $6,000 | $1,200 | $1,200 || Inventories | $10,000 | $1,680 | $2,000 || Other current assets | $2,000 | $720 | $800 || Land | $8,000 | $400 | $800 || Buildings—net | $36,000 | $2,400 | $4,800 || Equipment—net | $41,800 | $3,200 | $2,400 || **Total assets** | **$120,000** | **$12,000** | **$14,400** || **Liabilities and Equities** | **Pam Book Value** | **Sun Book Value** | **Sun Fair Value** ||-----------------------------|-------------------:|-------------------:|--------------------:|| Accounts payable | $4,000 | $1,200 | $1,200 || Mortgage payable—10% | $20,000 | $2,800 | $2,400 || Capital stock, $10 par | $40,000 | $4,000

Name: required:1-prepare journal entries for pam corp to record its acquisit
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Description: required:1-prepare journal entries for pam corp to record its acquisition of sun corp, including all allocations to individual asset and liability accounts.2- prepare a balance sheet for pam corp on 1/2/2016 after the acquisition and disolution of Su

Journal entries refers to the systematic documentation of the business transactions of a company in…

Answered: required: 1-prepare journal entries…

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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required:

1-prepare journal entries for pam corp to record its acquisition of sun corp, including all allocations to individual asset and liability accounts.

2- prepare a balance sheet for pam corp on 1/2/2016 after the acquisition and disolution of Sun.

### P1-5 Journal Entries and Balance Sheet for an Acquisition

Pam Corporation acquired Sun Corporation’s voting common stock costing $10,000,000 on January 2, 2016, resulting in Sun’s dissolution. The purchase involved 200,000 shares of Pam's common stock, valued at $8,000,000, plus an additional $2,000,000 in cash. Pam also incurred $200,000 for registration and issuing of the shares and $400,000 in other acquisition-related expenses. Below is the balance sheet information for both companies just before the acquisition (in thousands):

#### Balance Sheet Summary

| **Description** | **Pam Book Value** | **Sun Book Value** | **Sun Fair Value** |
|--------------------------|-------------------:|-------------------:|--------------------:|
| **Assets** | | | |
| Cash | $12,000 | $960 | $960 |
| Accounts receivable—net | $5,200 | $1,440 | $1,440 |
| Notes receivable—net | $6,000 | $1,200 | $1,200 |
| Inventories | $10,000 | $1,680 | $2,000 |
| Other current assets | $2,000 | $720 | $800 |
| Land | $8,000 | $400 | $800 |
| Buildings—net | $36,000 | $2,400 | $4,800 |
| Equipment—net | $41,800 | $3,200 | $2,400 |
| **Total assets** | **$120,000** | **$12,000** | **$14,400** |

| **Liabilities and Equities** | **Pam Book Value** | **Sun Book Value** | **Sun Fair Value** |
|-----------------------------|-------------------:|-------------------:|--------------------:|
| Accounts payable | $4,000 | $1,200 | $1,200 |
| Mortgage payable—10% | $20,000 | $2,800 | $2,400 |
| Capital stock, $10 par | $40,000 | $4,000

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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