Wooden Reed Inc. (WRI) issued 30,000 voting common shares to acquire all of the assets and liabilities of Creative strument Ltd. (CIL). On the acquisition date, WRI's shares were trading at $21.83 per share. After the transaction, IL owned 20% of WRI's outstanding shares. Below are the statements of financial position of both companies mmediately before the transaction, along with the fair values of CIL's assets and liabilities: WRI CIL Cash Accounts receivable nventory Property, plant, equipment (net) Current liabilities Long-term debt Common shares Retained earnings $754,900 $919,900 $265,000 carrying value carrying value $ 75,000 $ 35,000 $100,000 180,000 220,000 880,000 $ 1,355,000 $ 75,000 235,000 100,000 945,000 $ 1,355,000 E the consolidated statement of financial position was created immediately after the acquisition, the consolidated ommon share account will be: 67,500 125,000 350,000 $ 577,500 $ 25,000 125,000 165,000 262,500 $ 577,500 CIL fair value $ 35,000 69,500 147,000 388,000 25,000 125,000

Wooden Reed Inc. (WRI) issued 30,000 voting common shares to acquire all of the assets and liabilities of Creative strument Ltd. (CIL). On the acquisition date, WRI's shares were trading at $21.83 per share. After the transaction, IL owned 20% of WRI's outstanding shares. Below are the statements of financial position of both companies mmediately before the transaction, along with the fair values of CIL's assets and liabilities: WRI CIL Cash Accounts receivable nventory Property, plant, equipment (net) Current liabilities Long-term debt Common shares Retained earnings $754,900 $919,900 $265,000 carrying value carrying value $ 75,000 $ 35,000 $100,000 180,000 220,000 880,000 $ 1,355,000 $ 75,000 235,000 100,000 945,000 $ 1,355,000 E the consolidated statement of financial position was created immediately after the acquisition, the consolidated ommon share account will be: 67,500 125,000 350,000 $ 577,500 $ 25,000 125,000 165,000 262,500 $ 577,500 CIL fair value $ 35,000 69,500 147,000 388,000 25,000 125,000

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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