Homework Help is Here – Start Your Trial Now!
Business
Accounting
Pretzel Company acquired the assets (except for cash) and assumed the liabilities of Salt Com- pany on January 2, 2012. As compensation, Pretzel Company gave 30,000 shares of its common stock, 15,000 shares of its 10% preferred stock, and cash of $50,000 to the stockholders of Salt Company. On the acquisition date, Pretzel Company stock had the following characteristics: PRETZEL COMPANY Par Value Stock Common Preferred Immediately prior to the acquisition, Salt Company's balance sheet reported the following book values and fair values: SALT COMPANY Balance Sheet January 2, 2012 Cash Accounts receivable (net of $11,000 allowance) Inventory-LIFO cost $ 10 100 Land Buildings and equipment (net) Total assets Current liabilities Bonds Payable, 10% Common stock, $5 par value Other contributed capital Retained earnings Total liabilities and stockholders' equity Book value $ 165,000 220,000 275,000 396,000 1,144,000 $2,200,000 Fair Value $ 25 100 $ 275,000 450,000 770,000 396,000 309,000 $2,200,000 Fair value $ 165,000 198,000 330,000 550,000 1,144,000 $2,387,000 $ 275,000 495,000 Required: Prepare the journal entry on the books of Pretzel Company to record the acquisition of the assets and assumption of the liabilities of Salt Company.

Pretzel Company acquired the assets (except for cash) and assumed the liabilities of Salt Com- pany on January 2, 2012. As compensation, Pretzel Company gave 30,000 shares of its common stock, 15,000 shares of its 10% preferred stock, and cash of $50,000 to the stockholders of Salt Company. On the acquisition date, Pretzel Company stock had the following characteristics: PRETZEL COMPANY Par Value Stock Common Preferred Immediately prior to the acquisition, Salt Company's balance sheet reported the following book values and fair values: SALT COMPANY Balance Sheet January 2, 2012 Cash Accounts receivable (net of $11,000 allowance) Inventory-LIFO cost $ 10 100 Land Buildings and equipment (net) Total assets Current liabilities Bonds Payable, 10% Common stock, $5 par value Other contributed capital Retained earnings Total liabilities and stockholders' equity Book value $ 165,000 220,000 275,000 396,000 1,144,000 $2,200,000 Fair Value $ 25 100 $ 275,000 450,000 770,000 396,000 309,000 $2,200,000 Fair value $ 165,000 198,000 330,000 550,000 1,144,000 $2,387,000 $ 275,000 495,000 Required: Prepare the journal entry on the books of Pretzel Company to record the acquisition of the assets and assumption of the liabilities of Salt Company.

Financial Reporting, Financial Statement Analysis and Valuation
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter8: Investing Activities
Section: Chapter Questions
Problem 19PC
See similar textbooks
icon
Related questions
Question

Please don't provide images in Solutions thank you

EXERCISE 2-3 Asset Purchase, Cash and Stock L06 Pretzel Company acquired the assets (except for cash) and assumed the liabilities of Salt Com- pany on January 2, 2012. As compensation, Pretzel Company gave 30,000 shares of its common stock, 15,000 shares of its 10% preferred stock, and cash of $50,000 to the stockholders of Salt Company. On the acquisition date, Pretzel Company stock had the following characteristics: PRETZEL COMPANY Par Value Stock Common Preferred $10 100 Immediately prior to the acquisition, Salt Company's balance sheet reported the following book values and fair values: SALT COMPANY Balance Sheet January 2, 2012 Cash Accounts receivable (net of $11,000 allowance) Inventory LIF cost Land Buildings and equipment (net) Total assets Current liabilities Bonds Payable, 10% Common stock, $5 par value Other contributed capital Retained earnings Total liabilities and stockholders' equity Book value $ 165,000 220,000 275,000 396,000 1,144,000 $2,200,000 Fair Value $ 25 100 $275,000 450,000 770,000 396,000 309,000 $2,200,000 Fair value $ 165,000 198,000 330,000 550,000 1,144,000 $2,387,000 $ 275,000 495,000 Required: Prepare the journal entry on the books of Pretzel Company to record the acquisition of the assets and assumption of the liabilities of Salt Company.
Transcribed Image Text:EXERCISE 2-3 Asset Purchase, Cash and Stock L06 Pretzel Company acquired the assets (except for cash) and assumed the liabilities of Salt Com- pany on January 2, 2012. As compensation, Pretzel Company gave 30,000 shares of its common stock, 15,000 shares of its 10% preferred stock, and cash of $50,000 to the stockholders of Salt Company. On the acquisition date, Pretzel Company stock had the following characteristics: PRETZEL COMPANY Par Value Stock Common Preferred $10 100 Immediately prior to the acquisition, Salt Company's balance sheet reported the following book values and fair values: SALT COMPANY Balance Sheet January 2, 2012 Cash Accounts receivable (net of $11,000 allowance) Inventory LIF cost Land Buildings and equipment (net) Total assets Current liabilities Bonds Payable, 10% Common stock, $5 par value Other contributed capital Retained earnings Total liabilities and stockholders' equity Book value $ 165,000 220,000 275,000 396,000 1,144,000 $2,200,000 Fair Value $ 25 100 $275,000 450,000 770,000 396,000 309,000 $2,200,000 Fair value $ 165,000 198,000 330,000 550,000 1,144,000 $2,387,000 $ 275,000 495,000 Required: Prepare the journal entry on the books of Pretzel Company to record the acquisition of the assets and assumption of the liabilities of Salt Company.
Expert Solution
steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Corporate Distributions and Adjustments
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.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Financial Reporting, Financial Statement Analysis…
Financial Reporting, Financial Statement Analysis…
Finance
ISBN:
9781285190907
Author:
James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS