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

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Chapter1: Financial Statements And Business Decisions
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The following balance sheets were prepared for Pam Corporation and Slest Company on January 1, 20X2, just before they entered
into a business combination:
Item
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 Fair 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
$ 153,000
398,000
432,000
$ 983,000
$ 56,000
200,000
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)
$ 169,000
$ 49,000
25,000
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.
75,000
52,000
168,000
$369,000
Required:
Prepare a balance sheet of the combined company immediately following the acquisition, assuming Pam's shares were trading at $60
each.
Note: Amounts to be deducted should be indicated with minus sign.
Fair value
$ 94,000
160,000
247,000
$501,000
$49,000
30,000
Transcribed Image Text:The following balance sheets were prepared for Pam Corporation and Slest Company on January 1, 20X2, just before they entered into a business combination: Item 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 Fair 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 $ 153,000 398,000 432,000 $ 983,000 $ 56,000 200,000 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) $ 169,000 $ 49,000 25,000 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. 75,000 52,000 168,000 $369,000 Required: Prepare a balance sheet of the combined company immediately following the acquisition, assuming Pam's shares were trading at $60 each. Note: Amounts to be deducted should be indicated with minus sign. Fair value $ 94,000 160,000 247,000 $501,000 $49,000 30,000
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