Answered: Wilkins Inc. acquired 100% of the… | bartleby

Wilkins Inc. acquired 100% of the voting common stock of Granger Inc. on January 1, 2021. The book value and fair value of Granger’s accounts on that date (prior to creating the combination) are as follows, along with the book value of Wilkins’s accounts: Wilkins Book Value Granger Book Value Granger Fair Value Retained earnings, 1/1/21 $ 250,000 $ 240,000 Cash and receivables 170,000 70,000 $ 70,000 Inventory 230,000 180,000 210,000 Land 320,000 220,000 240,000 Buildings (net) 480,000 240,000 280,000 Equipment (net) 120,000 90,000 90,000 Liabilities 650,000 440,000 430,000 Common stock 360,000 80,000 Additional paid-in capital 60,000 40,000 Assume that Wilkins issued 13,000 shares of common stock with a $5 par value and a $46 fair value for all of the outstanding shares of Granger. What will be the consolidated Additional Paid-In Capital and Retained Earnings (January 1, 2021 balances) as a result of this acquisition transaction?

FINANCIAL ACCOUNTING

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Wilkins Inc. acquired 100% of the voting common stock of Granger Inc. on January 1, 2021. The book value and fair value of Granger’s accounts on that date (prior to creating the combination) are as follows, along with the book value of Wilkins’s accounts:

	Wilkins Book Value	Granger Book Value	Granger Fair Value
Retained earnings, 1/1/21	$	250,000	$	240,000
Cash and receivables		170,000		70,000	$	70,000
Inventory		230,000		180,000		210,000
Land		320,000		220,000		240,000
Buildings (net)		480,000		240,000		280,000
Equipment (net)		120,000		90,000		90,000
Liabilities		650,000		440,000		430,000
Common stock		360,000		80,000
Additional paid-in capital		60,000		40,000

Assume that Wilkins issued 13,000 shares of common stock with a $5 par value and a $46 fair value for all of the outstanding shares of Granger. What will be the consolidated Additional Paid-In Capital and Retained Earnings (January 1, 2021 balances) as a result of this acquisition transaction?

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 3 images

SEE SOLUTION Check out a sample Q&A here

Blurred answer

Knowledge Booster

Accounting for Intangible assets

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

PAR Inc. Inc. purchased 90% of the outstanding voting shares of SUB Inc. for $90,000 on January 1, 2021. Fair value versus carrying value differences were identified as follows: Jan 1, 2021 SUB Inc. carrying value fair value Cash $5,000 $5,000 Accounts Receivable $30,000 $30,000 Inventory $30,000 $50,000 Equipment (net) $25,000 $20,000 Land $20,000 $30,000 Trademark $10,000 $18,000 Total Assets $120,000 $153,000 Liabilities $70,000 $70,000 Common Shares $30,000 Retained Earnings $20,000 Total Liabilities and Equity $120,000 The equipment had a remaining useful life of 10 years from the date of acquisition. SUB's trademark is estimated to have a remaining life of 5 years from the date of acquisition. ASSUME INSTEAD that PAR has chosen to use the identifiable net assets method to value the non-controlling interest. Calculate at acquisition date: NCI ii) Goodwill
Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2022. Miller paid $784,000 in cash to the owners of Taylor to acquire these shares. In addition, the remaining 20 percent of Taylor shares continued to trade at a total value of $196,000 both before and after Miller’s acquisition. On January 1, 2022, Taylor reported a book value of $768,000 (Common Stock = $384,000; Additional Paid-In Capital = $115,200; Retained Earnings = $268,800). Several of Taylor’s buildings that had a remaining life of 20 years were undervalued by a total of $102,500. During the next three years, Taylor reports income and declares dividends as follows: Year Net Income Dividends 2022 $ 90,200 $ 13,100 2023 117,900 19,700 2024 131,300 26,300 If a consolidation worksheet is prepared as of January 1, 2022, what Entry S and Entry A should be included?
Huey Company acquires 100% of the stock of Solar Corporation on January 1, 2019, for $2,400,000 cash. As of that date Solar had the following account balances: Book Value Fair value Cash $630,000 $630,000 Accounts receivable 775,000 775,000 Inventory 350,000 400,000 Building-net (10 year life) 1,000,000 900,000 Equipment-net (5 year life) 300,000 400,000 Land 600,000 900,000 Accounts Payable 125,000 125,000 Bonds Payable (Face amount $1,000,000, due 12/31/2023) 2,000,000 2,050,000 Common stock 500,000 Additional paid-in capital 250,000 Retained earnings 780,000 In 2019 and 2020, Solar had net income of $250,000 and $240,000, respectively. In addition, Solar paid dividends of $16,000 in both years. Inventory is assumed to be sold in 2019. Assume straight line amortization/ depreciation for assets and bonds payable. What amount of Solar's Bonds Payable would appear on the consolidated balance sheet at December 31, 2019? Select one: A. $2,050,000 B.$2,040,000 C. $2,000,000 D. $2,010,000

Recommended textbooks for you

FINANCIAL ACCOUNTING

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS