On July 1, 20X1, Pushway Corporation issued 100,000 shares of common stock in exchange for all of Stroker Company’s common stock. The Pushway stock issued had a market value of $500,000 on the date of the exchange. Following are the July 1, 20X1, pre-acquisition balance sheets of Pushway and Stroker, plus fair value information for Stroker’s assets and liabilities.
On July 1, 20X1, Pushway Corporation issued 100,000 shares of common stock in exchange for all of Stroker Company’s common stock. The Pushway stock issued had a market value of $500,000 on the date of the exchange. Following are the July 1, 20X1, pre-acquisition balance sheets of Pushway and Stroker, plus fair value information for Stroker’s assets and liabilities.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter12: Intangibles
Section: Chapter Questions
Problem 18E
Related questions
Question
100%
On July 1, 20X1, Pushway Corporation issued 100,000 shares of common stock in exchange for all of Stroker Company’s common stock. The Pushway stock issued had a market value of $500,000 on the date of the exchange. Following are the July 1, 20X1, pre-acquisition balance sheets of Pushway and Stroker, plus fair value information for Stroker’s assets and liabilities.
Stroker | |||||||||
Pushway | Book Value | Fair Value | |||||||
Assets | |||||||||
Current assets | $ | 300,000 | $ | 100,000 | $ | 100,000 | |||
Long-term assets | 600,000 | 400,000 | 470,000 | ||||||
Total assets | $ | 900,000 | $ | 500,000 | $ | 570,000 | |||
Liabilities | |||||||||
Current liabilities | $ | 200,000 | $ | 50,000 | $ | 50,000 | |||
Long-term liabilities | 250,000 | 100,000 | 120,000 | ||||||
Total liabilities | 450,000 | 150,000 | $ | 170,000 | |||||
Common stock | 300,000 | 250,000 | |||||||
150,000 | 100,000 | ||||||||
Total stockholders' equity | 450,000 | 350,000 | |||||||
Total liabilities and equity | $ | 900,000 | $ | 500,000 | |||||
Required:
- Provide the
journal entry Pushway recorded for the acquisition of Stroker, assuming Pushway used the acquisition method. - What amount will be shown on the July 1, 20X1, consolidated balance sheet for the following:
- Total assets
- Total liabilities
- Total equity
- Now assume this transaction had been completed prior to the elimination of poolings of interest, and that the pooling method had been used to record the acquisition. Redo requirements 1 and 2.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 4 images
Follow-up Questions
Read through expert solutions to related follow-up questions below.
Follow-up Question
What amount will be shown on the July 1, 20X1, consolidated balance sheet for the following:
- Total equity
Now assume this transaction had been completed prior to the elimination of poolings of interest, and that the pooling method had been used to record the acquisition. Redo requirements 1 and 2:
- Total assets
- Total liabilities
- Total equity
Solution
by Bartleby Expert
Knowledge Booster
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.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Financial Reporting, Financial Statement Analysis…
Finance
ISBN:
9781285190907
Author:
James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:
Cengage Learning