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. P1-5Journal entries and balance sheet for an acquisitionPam Corporation paid $10,000,000 for Sun Corporation's voting common stock on January 2, 2016, andSun was dissolved. The purchase price consisted of 200,000 shares of Pam's common stock with a marketvalue of $8,000,000, plus $2,000,000 cash. In addition, Pam paid $200,000 for registering and issuingthe 200,000 shares of common stock and $400,000 for other costs of combination. Balance sheet infor-mation for the companies immediately before the acquisition is summarized as follows (in thousands):01088PamSunBook ValueBook Value Fair Value$ 960(6 1,440$ 9601,4401,2002,000$ 12,0005,2006,000 1,20010,0002,8008,00036,00040,000$120,000CashAccounts receivable-netidellNotes receivable-netInventories1,680720Other current assets800nistoALand400800Buildings-netEquipment-netTotal assets2,4003,200$12,0004,8002,400$14,400Accounts payableMortgage payable-10% o laCapital stock, $10 parOther paid-in capitalRetained earningsTotal equities$ 4,00020,00040,000$1,2002,800$1,2002,400ww.32,00024,000$120,000o4,000om 2,4001,600$12,000

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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…

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 34P

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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 paid $10,000,000 for Sun Corporation's voting common stock on January 2, 2016, and
Sun was dissolved. The purchase price consisted of 200,000 shares of Pam's common stock with a market
value of $8,000,000, plus $2,000,000 cash. In addition, Pam paid $200,000 for registering and issuing
the 200,000 shares of common stock and $400,000 for other costs of combination. Balance sheet infor-
mation for the companies immediately before the acquisition is summarized as follows (in thousands):
01
088
Pam
Sun
Book Value
Book Value Fair Value
$ 960
(6 1,440
$ 960
1,440
1,200
2,000
$ 12,000
5,200
6,000 1,200
10,000
2,800
8,000
36,000
40,000
$120,000
Cash
Accounts receivable-net
idell
Notes receivable-net
Inventories
1,680
720
Other current assets
800
nistoA
Land
400
800
Buildings-net
Equipment-net
Total assets
2,400
3,200
$12,000
4,800
2,400
$14,400
Accounts payable
Mortgage payable-10% o la
Capital stock, $10 par
Other paid-in capital
Retained earnings
Total equities
$ 4,000
20,000
40,000
$1,200
2,800
$1,200
2,400
ww.
32,000
24,000
$120,000
o4,000
om 2,400
1,600
$12,000

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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