Required information (The folowing information applies to the questions displayed below.] Pumpworks Inc. and Seaworthy Rope Company agreed to merge on January 1, 20X3. On the date of the merger agreement, the companies reported the following data: Seaworthy Rope Company Book Value Pumpworks Fair Balance Sheet Items Assets Cash & Receivables Inventory Land Plant & Equipment Less: Accumulated (131,000) Depreciation Total Assets$ 601,000 Liabilities & Equities Current Liabilities Fair Value Book Value Value $ 189,000 $109,000 $ 19,000 $ 19,000 107,000 107,000 168,000 160,000 29,000 9,000 41,000 14,000 409,000 309,000 219,000 123,000 picture picture (71,000) $746,000 $205,000 $197,000 $ 77,000 $ 77,000 $ 28,000 $ 28,000 Capital Stock Capital in Excess of 327,000 73,500 22,000 7,000 Par Value Retained Earnings Total Liabilities $ 601,000 & Equities 175,000 96,500 $205,000 Pumpworks has 10,900 shares of its $30 par value shares outstanding on January 1, 20X3, and Seaworthy has 4,900 shares of $15 par value stock outstanding. The market values of the shares are $310 and $70, respectively. Required: a. Pumpworks Issues 900 shares of stock in exchange for all of Seaworthy's net assets. Prepare a balance sheet for the combined entity Immediately following the merger. (Amounts to be deducted should be indicated by minus sign.) PUMPWORKS AND SUBSIDIARY Combined Balance Sheet January 1, 20X3 Assets Liabilities and Equities Total Liabilities and Total Assets Equities
Required information (The folowing information applies to the questions displayed below.] Pumpworks Inc. and Seaworthy Rope Company agreed to merge on January 1, 20X3. On the date of the merger agreement, the companies reported the following data: Seaworthy Rope Company Book Value Pumpworks Fair Balance Sheet Items Assets Cash & Receivables Inventory Land Plant & Equipment Less: Accumulated (131,000) Depreciation Total Assets$ 601,000 Liabilities & Equities Current Liabilities Fair Value Book Value Value $ 189,000 $109,000 $ 19,000 $ 19,000 107,000 107,000 168,000 160,000 29,000 9,000 41,000 14,000 409,000 309,000 219,000 123,000 picture picture (71,000) $746,000 $205,000 $197,000 $ 77,000 $ 77,000 $ 28,000 $ 28,000 Capital Stock Capital in Excess of 327,000 73,500 22,000 7,000 Par Value Retained Earnings Total Liabilities $ 601,000 & Equities 175,000 96,500 $205,000 Pumpworks has 10,900 shares of its $30 par value shares outstanding on January 1, 20X3, and Seaworthy has 4,900 shares of $15 par value stock outstanding. The market values of the shares are $310 and $70, respectively. Required: a. Pumpworks Issues 900 shares of stock in exchange for all of Seaworthy's net assets. Prepare a balance sheet for the combined entity Immediately following the merger. (Amounts to be deducted should be indicated by minus sign.) PUMPWORKS AND SUBSIDIARY Combined Balance Sheet January 1, 20X3 Assets Liabilities and Equities Total Liabilities and Total Assets Equities
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Required information
(The folowing information applies to the questions displayed below.]
Pumpworks Inc. and Seaworthy Rope Company agreed to merge on January 1, 20X3. On the date of the
merger agreement, the companies reported the following data:
Seaworthy Rope Company
Book
Value
Pumpworks
Fair
Balance
Sheet Items
Assets
Cash &
Receivables
Inventory
Land
Plant &
Equipment
Less:
Accumulated (131,000)
Depreciation
Total Assets$ 601,000
Liabilities
& Equities
Current
Liabilities
Fair
Value
Book Value
Value
$ 189,000
$109,000
$ 19,000
$ 19,000
107,000
107,000
168,000
160,000
29,000
9,000
41,000
14,000
409,000
309,000
219,000
123,000
picture
picture
(71,000)
$746,000
$205,000
$197,000
$ 77,000
$ 77,000
$ 28,000
$ 28,000
Capital
Stock
Capital in
Excess of
327,000
73,500
22,000
7,000
Par Value
Retained
Earnings
Total
Liabilities $ 601,000
& Equities
175,000
96,500
$205,000
Pumpworks has 10,900 shares of its $30 par value shares outstanding on January 1, 20X3, and Seaworthy
has 4,900 shares of $15 par value stock outstanding. The market values of the shares are $310 and $70,
respectively.
Required:
a. Pumpworks Issues 900 shares of stock in exchange for all of Seaworthy's net assets. Prepare a balance sheet for the
combined entity Immediately following the merger. (Amounts to be deducted should be indicated by minus sign.)
PUMPWORKS AND SUBSIDIARY
Combined Balance Sheet
January 1, 20X3
Assets
Liabilities and Equities
Total Liabilities and
Total Assets
Equities](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F62ef4338-0c9e-4b24-8609-77122903df1f%2Fa6f68ec5-dce4-4b50-8032-35a0af964f04%2F9b9scv3_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
(The folowing information applies to the questions displayed below.]
Pumpworks Inc. and Seaworthy Rope Company agreed to merge on January 1, 20X3. On the date of the
merger agreement, the companies reported the following data:
Seaworthy Rope Company
Book
Value
Pumpworks
Fair
Balance
Sheet Items
Assets
Cash &
Receivables
Inventory
Land
Plant &
Equipment
Less:
Accumulated (131,000)
Depreciation
Total Assets$ 601,000
Liabilities
& Equities
Current
Liabilities
Fair
Value
Book Value
Value
$ 189,000
$109,000
$ 19,000
$ 19,000
107,000
107,000
168,000
160,000
29,000
9,000
41,000
14,000
409,000
309,000
219,000
123,000
picture
picture
(71,000)
$746,000
$205,000
$197,000
$ 77,000
$ 77,000
$ 28,000
$ 28,000
Capital
Stock
Capital in
Excess of
327,000
73,500
22,000
7,000
Par Value
Retained
Earnings
Total
Liabilities $ 601,000
& Equities
175,000
96,500
$205,000
Pumpworks has 10,900 shares of its $30 par value shares outstanding on January 1, 20X3, and Seaworthy
has 4,900 shares of $15 par value stock outstanding. The market values of the shares are $310 and $70,
respectively.
Required:
a. Pumpworks Issues 900 shares of stock in exchange for all of Seaworthy's net assets. Prepare a balance sheet for the
combined entity Immediately following the merger. (Amounts to be deducted should be indicated by minus sign.)
PUMPWORKS AND SUBSIDIARY
Combined Balance Sheet
January 1, 20X3
Assets
Liabilities and Equities
Total Liabilities and
Total Assets
Equities
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