Stockholders of Acme Company, Baltic Company, and Colt Company are considering alternative arrangements for a business combination. Balance sheets and the fair values of each company’s assets on October 1, 2014, were as follows: Acme Baltic Colt Assets $3,886,180 $7,505,500 $957,660 Liabilities $2,037,820 $2,209,250 $261,400 Common stock, $20 par value 2,003,300 1,807,950 544,400 Other contributed capital —0— 602,270 189,960 Retained earnings (deficit) (154,940 ) 2,886,030 (38,100 ) Total equities $3,886,180 $7,505,500 $957,660 Fair values of assets $4,174,240 $9,044,400 $1,294,050 Acme Company shares have a fair value of $50. A fair (market) price is not available for shares of the other companies because they are closely held. Fair values of liabilities equal book values. (a) Prepare a balance sheet for the business combination. Assume the following: Acme Company acquires all the assets and assumes all the liabilities of Baltic and Colt Companies by issuing in exchange 140,190 shares of its common stock to Baltic Company and 40,110 shares of its common stock to Colt Company. (List assets in order of liquidity. Enter negative account balance with negative sign preceding the number e.g. -5,125 or parentheses e.g. (5,125).) ACME COMPANY Balance Sheet October 1, 2014 Assets Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings $ Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Stockholders' Equity $ Liabilities and Stockholders' Equity Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings $ Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Stockholders' Equity $

Stockholders of Acme Company, Baltic Company, and Colt Company are considering alternative arrangements for a business combination. Balance sheets and the fair values of each company’s assets on October 1, 2014, were as follows: Acme Baltic Colt Assets $3,886,180 $7,505,500 $957,660 Liabilities $2,037,820 $2,209,250 $261,400 Common stock, $20 par value 2,003,300 1,807,950 544,400 Other contributed capital —0— 602,270 189,960 Retained earnings (deficit) (154,940 ) 2,886,030 (38,100 ) Total equities $3,886,180 $7,505,500 $957,660 Fair values of assets $4,174,240 $9,044,400 $1,294,050 Acme Company shares have a fair value of $50. A fair (market) price is not available for shares of the other companies because they are closely held. Fair values of liabilities equal book values. (a) Prepare a balance sheet for the business combination. Assume the following: Acme Company acquires all the assets and assumes all the liabilities of Baltic and Colt Companies by issuing in exchange 140,190 shares of its common stock to Baltic Company and 40,110 shares of its common stock to Colt Company. (List assets in order of liquidity. Enter negative account balance with negative sign preceding the number e.g. -5,125 or parentheses e.g. (5,125).) ACME COMPANY Balance Sheet October 1, 2014 Assets Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings $ Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Stockholders' Equity $ Liabilities and Stockholders' Equity Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings $ Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Stockholders' Equity $

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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(a)

Prepare a balance sheet for the business combination. Assume the following: Acme Company acquires all the assets and assumes all the liabilities of Baltic and Colt Companies by issuing in exchange 140,190 shares of its common stock to Baltic Company and 40,110 shares of its common stock to Colt Company. (List assets in order of liquidity. Enter negative account balance with negative sign preceding the number e.g. -5,125 or parentheses e.g. (5,125).)

ACME COMPANY Balance Sheet October 1, 2014
Assets
Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings					$
Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings
Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Stockholders' Equity					$
Liabilities and Stockholders' Equity
Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings					$
Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings
Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings
Assets (except goodwill)Common StockGoodwillImpairment LossLiabilitiesOther Contributed CapitalRetained Earnings
Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Stockholders' Equity					$

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