Stockholders of Acme Company, Baltic Company, and Colt Company are considering alternative arrangements for a business combination. Balance sheets and the fair values of each company’s assets on October 1, 2014, were as follows: Acme Baltic Colt Assets $3,886,180 $7,505,500 $957,660 Liabilities $2,037,820 $2,209,250 $261,400 Common stock, $20 par value 2,003,300 1,807,950 544,400 Other contributed capital —0— 602,270 189,960 Retained earnings (deficit) (154,940 ) 2,886,030 (38,100 ) Total equities $3,886,180 $7,505,500 $957,660 Fair values of assets $4,174,240 $9,044,400 $1,294,050 Acme Company shares have a fair value of $50. A fair (market) price is not available for shares of the other companies because they are closely held. Fair values of liabilities equal book values. (a) Prepare a balance sheet for the business combination. Assume the following: Acme Company acquires all the assets and assumes all the liabilities of Baltic and Colt Companies by issuing in exchange 140,190 shares of its common stock to Baltic Company and 40,110 shares of its common stock to Colt Company. (List assets in order of liquidity. Enter negative account balance with negative sign preceding the number e.g. -5,125 or parentheses e.g. (5,125).) ACME COMPANY Balance Sheet October 1, 2014 Assets Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings $ Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Stockholders' Equity $ Liabilities and Stockholders' Equity Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings $ Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Stockholders' Equity $

Stockholders of Acme Company, Baltic Company, and Colt Company are considering alternative arrangements for a business combination. Balance sheets and the fair values of each company’s assets on October 1, 2014, were as follows: Acme Baltic Colt Assets $3,886,180 $7,505,500 $957,660 Liabilities $2,037,820 $2,209,250 $261,400 Common stock, $20 par value 2,003,300 1,807,950 544,400 Other contributed capital —0— 602,270 189,960 Retained earnings (deficit) (154,940 ) 2,886,030 (38,100 ) Total equities $3,886,180 $7,505,500 $957,660 Fair values of assets $4,174,240 $9,044,400 $1,294,050 Acme Company shares have a fair value of $50. A fair (market) price is not available for shares of the other companies because they are closely held. Fair values of liabilities equal book values. (a) Prepare a balance sheet for the business combination. Assume the following: Acme Company acquires all the assets and assumes all the liabilities of Baltic and Colt Companies by issuing in exchange 140,190 shares of its common stock to Baltic Company and 40,110 shares of its common stock to Colt Company. (List assets in order of liquidity. Enter negative account balance with negative sign preceding the number e.g. -5,125 or parentheses e.g. (5,125).) ACME COMPANY Balance Sheet October 1, 2014 Assets Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings $ Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Stockholders' Equity $ Liabilities and Stockholders' Equity Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings $ Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Stockholders' Equity $

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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(a)

Prepare a balance sheet for the business combination. Assume the following: Acme Company acquires all the assets and assumes all the liabilities of Baltic and Colt Companies by issuing in exchange 140,190 shares of its common stock to Baltic Company and 40,110 shares of its common stock to Colt Company. (List assets in order of liquidity. Enter negative account balance with negative sign preceding the number e.g. -5,125 or parentheses e.g. (5,125).)

ACME COMPANY Balance Sheet October 1, 2014
Assets
Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings					$
Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings
Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Stockholders' Equity					$
Liabilities and Stockholders' Equity
Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings					$
Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings
Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings
Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings
Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Stockholders' Equity					$

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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