Concept explainers
a.
Concept Introduction:
Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.
the number of shares did P issue to acquire Stork’s assets and liabilities.
a.
Answer to Problem 1.38P
The number of shares issued is
Explanation of Solution
Computation of a number of shares issued:
b.
Concept Introduction:
Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.
the total market value of the shares issued by P.
b.
Answer to Problem 1.38P
The total market value of the shares issued by P is
Explanation of Solution
Computation of the total market value of the shares issued:
c.
Concept Introduction:
Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.
the fair value of inventory held by S at the date of combination.
c.
Answer to Problem 1.38P
The fair value of inventory held by Stork at the date of combination is
Explanation of Solution
Computation of fair value of inventory held:
d.
Concept Introduction:
Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.
the fair value of identifiable net assets held by Stork at the date of combination.
d.
Answer to Problem 1.38P
The fair value of identifiable net assets held by Stork at the date of combination is
Explanation of Solution
Computation of the fair value of identifiable net assets held:
| Particulars | Amount | |
| Cash | ||
| Inventory | ||
| Building and Equipment (Net) | ||
| Accounts Payable | ||
| Bonds Payable | ||
| Bonds Premium | ||
| Net Assets of Combined Entity | ||
| Cash | ||
| Accounts Receivable | ||
| Inventory | ||
| Building and Equipment (Net) | ||
| Accounts Payable | ||
| Bonds Payable | ||
| Bonds Premium | ||
| Net Assets of P Inc. | ||
| Net Assets of S Company |
e.
Concept Introduction:
Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities to combine to form a new entity.
the amount of
e.
Answer to Problem 1.38P
The amount of goodwill is
Explanation of Solution
Computation of fair value of identifiable net assets held:
Total Market Value of shares of P Inc. LessNet Assets of S Company
f.
Concept Introduction:
Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities to combine to form a new entity.
the balance in
f.
Answer to Problem 1.38P
The balance in retained earnings to be reported is
Explanation of Solution
The number is reported in its financial statement by P Inc. of
g.
Concept Introduction:
Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.
the amount of
g.
Answer to Problem 1.38P
The balance in retained earnings to be reported is
Explanation of Solution
Computation of depreciation amount:
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Chapter 1 Solutions
ADVANCED FINANCIAL ACCOUNTING IA
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