The following balance sheets were prepared for Pam Corporation and Slest Company on January 1, 20x2. Just before they entered into a business combination: Iten Assets cash and Receivables Inventory Buildings and Equipment Less: Accumulated Depreciation Total Assets Liabilities and Equities Accounts Payable Notes Payable Common stock: $10 par value $8 par value Additional Paid-In Capital Retained Earnings Total Liabilities and Equities Pan Corporation Book value Assets $ 153,000 307,000 601,000 (234,000) $ 827,000 Total Assets $ 56,000 193,000 174,000 139,000 265,000 $ 827,000 Fair value $ 153,000 398,000 432,000 $ 983,000 $ 56,000 200,000 each. Note: Amounts to be deducted should be indicated with minus sign. January 1, 20X2 PAM CORPORATION AND SUBSIDIARY Combined Balance Sheet Slest Company Liabilities and Equities Book Value Total Liabilities and Equities $ 94,000 90,000 251,000 (66,000) $369,000 Pam acquired all of Slest Company's assets and liabilities on January 1, 20X2, in exchange for its common shares. Pam Issued 8.900 shares of stock to complete the business combination. $ 49,000 25,000 Required: Prepare a balance sheet of the combined company immediately following the acquisition, assuming Pam's shares were trading at $60 75,000 52,000 168,000 $369,000 Fair value $ 94,000 160,000 247,000 $501,000 $ 49,000 30,000
The following balance sheets were prepared for Pam Corporation and Slest Company on January 1, 20x2. Just before they entered into a business combination: Iten Assets cash and Receivables Inventory Buildings and Equipment Less: Accumulated Depreciation Total Assets Liabilities and Equities Accounts Payable Notes Payable Common stock: $10 par value $8 par value Additional Paid-In Capital Retained Earnings Total Liabilities and Equities Pan Corporation Book value Assets $ 153,000 307,000 601,000 (234,000) $ 827,000 Total Assets $ 56,000 193,000 174,000 139,000 265,000 $ 827,000 Fair value $ 153,000 398,000 432,000 $ 983,000 $ 56,000 200,000 each. Note: Amounts to be deducted should be indicated with minus sign. January 1, 20X2 PAM CORPORATION AND SUBSIDIARY Combined Balance Sheet Slest Company Liabilities and Equities Book Value Total Liabilities and Equities $ 94,000 90,000 251,000 (66,000) $369,000 Pam acquired all of Slest Company's assets and liabilities on January 1, 20X2, in exchange for its common shares. Pam Issued 8.900 shares of stock to complete the business combination. $ 49,000 25,000 Required: Prepare a balance sheet of the combined company immediately following the acquisition, assuming Pam's shares were trading at $60 75,000 52,000 168,000 $369,000 Fair value $ 94,000 160,000 247,000 $501,000 $ 49,000 30,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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