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Business Combination
Following are the
In preparation for a possible business combination, a team of experts from Boogie Musical made a thorough examination and audit of Toot-Toot Tuba. They found that Toot-Toot’s assets and liabilities were correctly stated except that they estimated uncollectible accounts at $1.400. The experts also estimated the market value of the inventory at $35.000 and the market value of the plant and equipment at $500.000. The business combination took place on January 1, 20X6, and on that date Boogie Musical acquired all the assets and liabilities of Toot-Toot Tuba. On that date. Boogie’s common stock was selling for $55 per share.
Required
Record the combination on Boogie’s books assuming that Boogie issued 9.000 of its $10 par common shares in exchange for Toot-Toot’s assets and liabilities.
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Chapter 1 Solutions
EBK ADVANCED FINANCIAL ACCOUNTING
- Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage LearningCentury 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
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