Required Information [The following Information applies to the questions displayed below] Pumpworks Incorporated and Seaworthy Rope Company agreed to merge on January 1, 20X3. On the date of the merger agreement, the companies reported the following data: Balance Sheet Items Assets Cash and Receivables Inventory Land Plant and Equipment Less: Accumulated Depreciation Total Assets Liabilities and Equities Current Liabilities Capital Stock Capital in Excess of Par Value Retained Earnings Total Liabilities and Equities Pumpworks Book Value $ 90,000 100,000 100,000 400,000 (150,000) $ 540,000 $ 80,000 200,000 20,000 240,000 $ 540,000 Fair Value $ 90,000 150,000 140,000 300,000 $680,000 $ 80,000 Seaworthy Rope Company Book Value Fair Value $ 20,000 30,000 10,000 200,000 (80,000) $180,000 $ 20,000 20,000 5,000 135,000 $180,000 $ 20,000 42,000 15,000 140,000 $217,000 $ 20,000 Pumpworks has 10,000 shares of Its $20 par value shares outstanding on January 1, 20X3, and Seaworthy has 4,000 shares of $5 par value stock outstanding. The market values of the shares are $300 and $50, respectively. Required: a. Pumpworks Issues 700 shares of stock in exchange for all of Seaworthy's net assets. Prepare a balance sheet for the combined entity Immediately following the merger. Note: Amounts to be deducted should be Indicated by minus sign.
Required Information [The following Information applies to the questions displayed below] Pumpworks Incorporated and Seaworthy Rope Company agreed to merge on January 1, 20X3. On the date of the merger agreement, the companies reported the following data: Balance Sheet Items Assets Cash and Receivables Inventory Land Plant and Equipment Less: Accumulated Depreciation Total Assets Liabilities and Equities Current Liabilities Capital Stock Capital in Excess of Par Value Retained Earnings Total Liabilities and Equities Pumpworks Book Value $ 90,000 100,000 100,000 400,000 (150,000) $ 540,000 $ 80,000 200,000 20,000 240,000 $ 540,000 Fair Value $ 90,000 150,000 140,000 300,000 $680,000 $ 80,000 Seaworthy Rope Company Book Value Fair Value $ 20,000 30,000 10,000 200,000 (80,000) $180,000 $ 20,000 20,000 5,000 135,000 $180,000 $ 20,000 42,000 15,000 140,000 $217,000 $ 20,000 Pumpworks has 10,000 shares of Its $20 par value shares outstanding on January 1, 20X3, and Seaworthy has 4,000 shares of $5 par value stock outstanding. The market values of the shares are $300 and $50, respectively. Required: a. Pumpworks Issues 700 shares of stock in exchange for all of Seaworthy's net assets. Prepare a balance sheet for the combined entity Immediately following the merger. Note: Amounts to be deducted should be Indicated by minus sign.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Dinesh bhai
![Required Information
[The following information applies to the questions displayed below.]
Pumpworks Incorporated and Seaworthy Rope Company agreed to merge on January 1, 20X3. On the date of the merger
agreement, the companies reported the following data:
Balance Sheet Items
Assets
Cash and Receivables
Inventory
Land
Plant and Equipment
Less: Accumulated Depreciation
Total Assets
Liabilities and Equities
Current Liabilities
Capital Stock
Capital in Excess of Par Value
Retained Earnings
Total Liabilities and Equities
Pumpworks
Book Value
$ 90,000
100,000
100,000
400,000
(150,000)
$ 540,000
$ 80,000
200,000
20,000
240,000
$ 540,000
Fair Value
$ 90,000
150,000
140,000
300,000
$680,000
$ 80,000
Seaworthy Rope Company
Book Value
Fair Value
$ 20,000
30,000
10,000
200,000
(80,000)
$180,000-
$ 20,000
20,000
5,000
135,000
$180,000
$ 20,000
42,000
15,000
140,000
$217,000
$ 20,000
Pumpworks has 10,000 shares of Its $20 par value shares outstanding on January 1, 20X3, and Seaworthy has 4,000
shares of $5 par value stock outstanding. The market values of the shares are $300 and $50, respectively.
Required:
a. Pumpworks Issues 700 shares of stock In exchange for all of Seaworthy's net assets. Prepare a balance sheet for the combined
entity Immediately following the merger.
Note: Amounts to be deducted should be Indicated by minus sign.
R](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8e9ab59b-31bf-47c5-9563-708828c2c2e9%2F4b8fa66b-ef4e-4273-890d-39f418fda156%2F20iqocs_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required Information
[The following information applies to the questions displayed below.]
Pumpworks Incorporated and Seaworthy Rope Company agreed to merge on January 1, 20X3. On the date of the merger
agreement, the companies reported the following data:
Balance Sheet Items
Assets
Cash and Receivables
Inventory
Land
Plant and Equipment
Less: Accumulated Depreciation
Total Assets
Liabilities and Equities
Current Liabilities
Capital Stock
Capital in Excess of Par Value
Retained Earnings
Total Liabilities and Equities
Pumpworks
Book Value
$ 90,000
100,000
100,000
400,000
(150,000)
$ 540,000
$ 80,000
200,000
20,000
240,000
$ 540,000
Fair Value
$ 90,000
150,000
140,000
300,000
$680,000
$ 80,000
Seaworthy Rope Company
Book Value
Fair Value
$ 20,000
30,000
10,000
200,000
(80,000)
$180,000-
$ 20,000
20,000
5,000
135,000
$180,000
$ 20,000
42,000
15,000
140,000
$217,000
$ 20,000
Pumpworks has 10,000 shares of Its $20 par value shares outstanding on January 1, 20X3, and Seaworthy has 4,000
shares of $5 par value stock outstanding. The market values of the shares are $300 and $50, respectively.
Required:
a. Pumpworks Issues 700 shares of stock In exchange for all of Seaworthy's net assets. Prepare a balance sheet for the combined
entity Immediately following the merger.
Note: Amounts to be deducted should be Indicated by minus sign.
R
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