
Panther Company is acquiring the net assets of Sharon Company. The book and fair values of Sharon’s accounts are as follows:
Accounts Book Fair
Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100,000 $120,000
Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000 80,000
Building and Equipment . . . . . . . . . . . . . . . . . . . . . . . 300,000 400,000
Customer List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 20,000
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .100,000 100,000
What values will be assigned to current assets, land, building and equipment, the customer list, liabilities,
a. $800,000
b. $450,000

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- Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included are fair values for Sol Company accounts. Cash Receivables Inventory Land Building and equipment (net) Franchise agreements Accounts payable Accrued expenses Longterm liabilities Common stock-$20 par value Common stock-$5 par value Additional paid-in capital Retained earnings, 1/1 Revenues Expenses Inventory Land Accounts Buildings and equipment Franchise agreements Goodwill Revenues Additional paid-in capital $ Expenses Retained earnings, 1/1 Retained earnings, 12/31 Padre Company Amounts Sol Company Book Values Book Values Fair Values 12/31 12/31 84, 100 392,000 249,000 200,000 237,000 Note: Parentheses indicate a credit balance. On December 31, Padre acquires Sol's outstanding stock by paying $349,000 in cash and issuing 11,400 shares of its own common stock with a fair value of $40 per share. Padre paid legal and accounting fees of $23,400 as well as $12,800 in stock…arrow_forwardFollowing are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included are fair values for Sol Company accounts. Cash Receivables Inventory Land Building and equipment (net) Franchise agreements Accounts payable Accrued expenses Longterm liabilities Common stock-$20 par value Common stock-$5 par value Additional paid-in capital Retained earnings, 1/1 Revenues Expenses Inventory Land Accounts Buildings and equipment Franchise agreements Goodwill $ Revenues Additional paid-in capital Expenses Retained earnings, 1/1 Retained earnings, 12/31 Padre Company Book Values 12/31 Amounts Sol Company Book Values 12/31 Fair Values 12/31 59,400 381,000 349, 100 142,900 387,500 268,800 (149,000) (40,000) (1,132,500) (660,000) (660,000) (660,000) 317,000 240,000 381,000 520,000 296,000 762,500 170,000 672,500 321,000 Note: Parentheses indicate a credit balance. On December 31, Padre acquires Sol's outstanding stock by paying $219,000 in cash and issuing…arrow_forwardSubject: accountingarrow_forward
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