Flynn acquires 100 percent of the outstanding voting shares of Macek Company on January 1, 2021. To obtain these shares, Flynn pays $400 cash (in thousands) and issues 10,00o0 shares of $20 par value common stock on this date. Flynn's stock had a fair value of $36 per share on that date. Flynn also pays $15 (in thousands) to a local investment firm for arranging the acquisition. An additional $10 (in thousands) was paid by Flynn in stock issuance costs. The book values for both Flynn and Macek immediately preceding the acquisition follow. The fair value of each of Flynn and Macek accounts is also included. In addition, Macek holds a fully amortized trademark that still retains a $40 (in thousands) value. The figures below are in thousands. Any related question also is in thousands. Macek Company Book Fair Flynn, Inc Value Value $ 900 480 $ 80 180 $ 80 Cash Receivables Inventory 160 260 120 300 130 280 660 300 Land 1,200 360 220 100 60 Buildings (net) Equipment Accounts payable Long-term liabilities Common stock Additional paid-in capital Retained earnings 75 480 60 340 80 300 1,140 1,000 200 1,080 480
Flynn acquires 100 percent of the outstanding voting shares of Macek Company on January 1, 2021. To obtain these shares, Flynn pays $400 cash (in thousands) and issues 10,00o0 shares of $20 par value common stock on this date. Flynn's stock had a fair value of $36 per share on that date. Flynn also pays $15 (in thousands) to a local investment firm for arranging the acquisition. An additional $10 (in thousands) was paid by Flynn in stock issuance costs. The book values for both Flynn and Macek immediately preceding the acquisition follow. The fair value of each of Flynn and Macek accounts is also included. In addition, Macek holds a fully amortized trademark that still retains a $40 (in thousands) value. The figures below are in thousands. Any related question also is in thousands. Macek Company Book Fair Flynn, Inc Value Value $ 900 480 $ 80 180 $ 80 Cash Receivables Inventory 160 260 120 300 130 280 660 300 Land 1,200 360 220 100 60 Buildings (net) Equipment Accounts payable Long-term liabilities Common stock Additional paid-in capital Retained earnings 75 480 60 340 80 300 1,140 1,000 200 1,080 480
Chapter11: Property Dispositions
Section: Chapter Questions
Problem 26P
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Transcribed Image Text:Flynn acquires 100 percent of the outstanding voting shares of Macek Company on January 1, 2021. To obtain these shares, Flynn pays $400
cash (in thousands) and issues 10,00o0 shares of $20 par value common stock on this date. Flynn's stock had a fair value of $36 per share on
that date. Flynn also pays $15 (in thousands) to a local investment firm for arranging the acquisition. An additional $10 (in thousands) was paid
by Flynn in stock issuance costs.
The book values for both Flynn and Macek immediately preceding the acquisition follow. The fair value of each of Flynn and Macek accounts is
also included. In addition, Macek holds a fully amortized trademark that still retains a $40 (in thousands) value. The figures below are in
thousands. Any related question also is in thousands.
Macek Company
Book
Flynn,
Inc
Fair
Value
$ 80
160
Value
$ 900
480
$ 80
180
Cash
Receivables
260
120
300
130
280
660
Inventory
Land
300
1,200
360
220
Buildings (net)
Equipment
Accounts payable
Long-term liabilities
Common stock
100
75
480
60
60
340
80
300
1,140
1,000
200
Additional paid-in capital
Retained earnings
1,080
480
What amount will be reported for consolidated inventory?
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