[The following information applies to the questions displayed below. Pumpworks Inc. and Seaworthy Rope Company agreed to merge on January 1, 20X3. On the date of the merger agreement, the companies reported the following data: Pumpworks Balance Sheet Items Assets Cash & Receivables Inventory Land Plant & Equipment Less: Accumulated Depreciation Total Assets Liabilities & Equities Current Liabilities Capital Stock Capital in Excess of Par Value Retained Earnings Total Liabilities & Equities Book Value $ 96,000 113,000 113,000 405,000 (140,000) $ 587,000 $ 66,000 324,000 21,000 176,000 $ 587,000 Fair Value Book Value $ 96,000 165,000 Seaworthy Rope Company 144,000 311,000 $716,000 $ 66,000 $ 16,000 26,000 6,000 218,000 (67,000) $199,000 $ 20,000 72,000 6,000 101,000 $199,000 Fair Value $ 16,000 38,000 11,000 127,000 $192,000 $ 20,000 Pumpworks has 10,800 shares of its $30 par value shares outstanding on January 1, 20X3, and Seaworthy has 4,800 shares of $15 par value stock outstanding. The market values of the shares are $210 and $60. respectively.

[The following information applies to the questions displayed below. Pumpworks Inc. and Seaworthy Rope Company agreed to merge on January 1, 20X3. On the date of the merger agreement, the companies reported the following data: Pumpworks Balance Sheet Items Assets Cash & Receivables Inventory Land Plant & Equipment Less: Accumulated Depreciation Total Assets Liabilities & Equities Current Liabilities Capital Stock Capital in Excess of Par Value Retained Earnings Total Liabilities & Equities Book Value $ 96,000 113,000 113,000 405,000 (140,000) $ 587,000 $ 66,000 324,000 21,000 176,000 $ 587,000 Fair Value Book Value $ 96,000 165,000 Seaworthy Rope Company 144,000 311,000 $716,000 $ 66,000 $ 16,000 26,000 6,000 218,000 (67,000) $199,000 $ 20,000 72,000 6,000 101,000 $199,000 Fair Value $ 16,000 38,000 11,000 127,000 $192,000 $ 20,000 Pumpworks has 10,800 shares of its $30 par value shares outstanding on January 1, 20X3, and Seaworthy has 4,800 shares of $15 par value stock outstanding. The market values of the shares are $210 and $60. respectively.

Name: Accounting 4AsRequired information1. 1,300 shares of common.2. 2,000 s
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Description: Accounting 4AsRequired information1. 1,300 shares of common.2. 2,000 shares of common.3. 3,100 shares of common.1 Capital stockCapital in excess of par valueRetained earnings2 Capital stockCapital in excess of par value.Retained earnings3 Capital sto

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter16: Advanced Topics Concerning Complex Auditing Judgments

Section: Chapter Questions

Problem 21MCQ

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