Pinnacle Corporation acquired all of Stengl Corporation's common stock by issuing 500,000 shares of $0.01 par common stock with a current market value of $15,000,000. Related accountants' and attorneys' fees were $400,000, paid in cash. The total book value of Stengl's shareholders' equity consists of capital stock of $10,000 and retained earnings of $1,690,000. Book values and fair values of Stengl's assets and liabilities are given below: Book Value Cash and receivables $200,000 Inventories Fair Value $180,000 800,000 500,000 2,000,000 1,300,000 (300,000) (300,000) (1,000,000) (1,100,000) $1,700,000 $580,000 Plant assets, net Current liabilities Long-term debt Totals In addition, Stengl has previously unrecorded identifiable intangible assets with a fair value of $400,000 that meet ASC Topic 805 criteria for recognition.
Pinnacle Corporation acquired all of Stengl Corporation's common stock by issuing 500,000 shares of $0.01 par common stock with a current market value of $15,000,000. Related accountants' and attorneys' fees were $400,000, paid in cash. The total book value of Stengl's shareholders' equity consists of capital stock of $10,000 and retained earnings of $1,690,000. Book values and fair values of Stengl's assets and liabilities are given below: Book Value Cash and receivables $200,000 Inventories Fair Value $180,000 800,000 500,000 2,000,000 1,300,000 (300,000) (300,000) (1,000,000) (1,100,000) $1,700,000 $580,000 Plant assets, net Current liabilities Long-term debt Totals In addition, Stengl has previously unrecorded identifiable intangible assets with a fair value of $400,000 that meet ASC Topic 805 criteria for recognition.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 25E
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Help please get the ans accounting question
Transcribed Image Text:Pinnacle Corporation acquired all of Stengl Corporation's common stock by issuing 500,000 shares of $0.01 par common stock with a current market value of $15,000,000. Related accountants' and attorneys' fees were
$400,000, paid in cash. The total book value of Stengl's shareholders' equity consists of capital stock of $10,000 and retained earnings of $1,690,000. Book values and fair values of Stengl's assets and liabilities are given
below:
Book Value
Cash and receivables $200,000
Inventories
Plant assets, net
Current liabilities
Long-term debt
Totals
Fair Value
$180,000
800,000 500,000
2,000,000 1,300,000
(300,000) (300,000)
(1,000,000) (1,100,000)
$1,700,000 $580,000
In addition, Stengl has previously unrecorded identifiable intangible assets with a fair value of $400,000 that meet ASC Topic 805 criteria for recognition.
Transcribed Image Text:Description
Investment in Stengl
Merger expenses
Common stock
Additional paid-in capital
Cash
General Journal
Description
(E)
Capital stock
(R)
Identifiable intangible assets
Cash and receivables
Plant assets, net
Inventories
Long-term debt
◆
(b) Prepare the working paper eliminating entries to consolidate the balance sheets of Pinnacle Corporation and Stengl Corporation at the date of acquisition.
Enter numerical answers using all zeros (do not abbreviate to thousands or millions).
ConsolidationJournal
◆
Debit
◆
0
5000
7495000
0
Debit
ooo
0
0
0
o o o o o o o
0
Credit
7500000
400000
0
0
0
400000
Credit
ooo
0
0
0
ooooooo
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