Patel Company issued 107,600 shares of $1 par value common stock (market value of $6/share) for the net assets of Seely Company on January 1, 2014, in a statutory merger. Seely Company had the following assets, liabilities, and owners’ equity at that time:
Patel Company issued 107,600 shares of $1 par value common stock (market value of $6/share) for the net assets of Seely Company on January 1, 2014, in a statutory merger. Seely Company had the following assets, liabilities, and owners’ equity at that time:
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
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 9P
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Question
Patel Company issued 107,600 shares of $1 par value common stock (market value of $6/share) for the net assets of Seely Company on January 1, 2014, in a statutory merger. Seely Company had the following assets, liabilities, and owners’ equity at that time:
Book Value | ||||||
Tax Basis |
Fair Value |
Difference |
||||
Cash | $18,080 | $18,080 | $—0— | |||
107,430 | 107,430 | —0— | ||||
Inventory (LIFO) | 84,850 | 134,420 | 49,570 | |||
Land | 28,650 | 53,340 | 24,690 | |||
Plant assets (net) | 410,660 | 476,330 | 65,670 | |||
Total assets | $649,670 | $789,600 | ||||
Allowance for uncollectible accounts | $9,540 | $9,540 | $—0— | |||
Accounts payable | 54,020 | 54,020 | —0— | |||
Bonds payable | 180,300 | 160,970 | (19,330) | |||
Common stock, $1 par value | 87,340 | |||||
Other contributed capital | 141,000 | |||||
177,470 | ||||||
Total equities | $649,670 |
Prepare the
Account Titles and Explanation
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