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What total amount of additional paid-in capital will Campbell recognize from this acquisition?

What total amount of additional paid-in capital will Campbell recognize from this acquisition?

FINANCIAL ACCOUNTING
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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QUESTION 1 The financial statements for Campbell, Inc., and Newton Company for the year ended December 31, 2021, prior to the business combination whereby Campbell acquired Newton, are as follows (in thousands): Revenues Expenses Net income Retained earnings, 1/1 Net income Dividends Retained earning, 12/31 Cash Receivables and inventory Buildings (net) Equipment (net) Total assets Liabilities Common stock Additional paid-in capital Retained earnings Campbell Newton $ 2,600 $ 700 1,880 400 $300 $ 500 300 0 $ 800 $ 230 $ 720 $ 2,400 720 (270) $ 2,850 $ 240 1,200 2,700 2,100 $ 6,240 $ 1,500 1,080 810 360 650 1,300 $ 2,540 $ 720 400 620 2,850 800 Total liabilities & stockholders' equity $ 6,240 $ 2,540 On December 31, 2021, Campbell obtained a loan for $650 and used the proceeds, along with the transfer of 35 shares of its $10 par value common stock, in exchange for all of Newton's common stock. At the time of the transaction, Campbell's common stock had a fair value of $40 per share. In connection with the business combination, Campbell paid $25 to a broker for arranging the transaction and $30 in stock issuance costs. At the time of the transaction, Newton's equipment was actually worth $1,450 but its buildings were only valued at $590. What total amount of additional paid-in capital will Campbell recognize from this acquisition? $1,400. $1,020. $1,105. $1,080. $1,050.
Transcribed Image Text:QUESTION 1 The financial statements for Campbell, Inc., and Newton Company for the year ended December 31, 2021, prior to the business combination whereby Campbell acquired Newton, are as follows (in thousands): Revenues Expenses Net income Retained earnings, 1/1 Net income Dividends Retained earning, 12/31 Cash Receivables and inventory Buildings (net) Equipment (net) Total assets Liabilities Common stock Additional paid-in capital Retained earnings Campbell Newton $ 2,600 $ 700 1,880 400 $300 $ 500 300 0 $ 800 $ 230 $ 720 $ 2,400 720 (270) $ 2,850 $ 240 1,200 2,700 2,100 $ 6,240 $ 1,500 1,080 810 360 650 1,300 $ 2,540 $ 720 400 620 2,850 800 Total liabilities & stockholders' equity $ 6,240 $ 2,540 On December 31, 2021, Campbell obtained a loan for $650 and used the proceeds, along with the transfer of 35 shares of its $10 par value common stock, in exchange for all of Newton's common stock. At the time of the transaction, Campbell's common stock had a fair value of $40 per share. In connection with the business combination, Campbell paid $25 to a broker for arranging the transaction and $30 in stock issuance costs. At the time of the transaction, Newton's equipment was actually worth $1,450 but its buildings were only valued at $590. What total amount of additional paid-in capital will Campbell recognize from this acquisition? $1,400. $1,020. $1,105. $1,080. $1,050.
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