Homework Help is Here – Start Your Trial Now!
Business
Accounting
What total amount of additional paid-in capital will Campbell recognize from this acquisition?

What total amount of additional paid-in capital will Campbell recognize from this acquisition?

Financial Accounting Intro Concepts Meth/Uses
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter14: Intercorporate Investments In Common Stock
Section: Chapter Questions
Problem 26E
See similar textbooks
icon
Related questions
Question
QUESTION 1 The financial statements for Campbell, Inc., and Newton Company for the year ended December 31, 2021, prior to the business combination whereby Campbell acquired Newton, are as follows (in thousands): Revenues Expenses Net income Retained earnings, 1/1 Net income Dividends Retained earning, 12/31 Cash Receivables and inventory Buildings (net) Equipment (net) Total assets Liabilities Common stock Additional paid-in capital Retained earnings Campbell Newton $ 2,600 $ 700 1,880 400 $300 $ 500 300 0 $ 800 $ 230 $ 720 $ 2,400 720 (270) $ 2,850 $ 240 1,200 2,700 2,100 $ 6,240 $ 1,500 1,080 810 360 650 1,300 $ 2,540 $ 720 400 620 2,850 800 Total liabilities & stockholders' equity $ 6,240 $ 2,540 On December 31, 2021, Campbell obtained a loan for $650 and used the proceeds, along with the transfer of 35 shares of its $10 par value common stock, in exchange for all of Newton's common stock. At the time of the transaction, Campbell's common stock had a fair value of $40 per share. In connection with the business combination, Campbell paid $25 to a broker for arranging the transaction and $30 in stock issuance costs. At the time of the transaction, Newton's equipment was actually worth $1,450 but its buildings were only valued at $590. What total amount of additional paid-in capital will Campbell recognize from this acquisition? $1,400. $1,020. $1,105. $1,080. $1,050.
Transcribed Image Text:QUESTION 1 The financial statements for Campbell, Inc., and Newton Company for the year ended December 31, 2021, prior to the business combination whereby Campbell acquired Newton, are as follows (in thousands): Revenues Expenses Net income Retained earnings, 1/1 Net income Dividends Retained earning, 12/31 Cash Receivables and inventory Buildings (net) Equipment (net) Total assets Liabilities Common stock Additional paid-in capital Retained earnings Campbell Newton $ 2,600 $ 700 1,880 400 $300 $ 500 300 0 $ 800 $ 230 $ 720 $ 2,400 720 (270) $ 2,850 $ 240 1,200 2,700 2,100 $ 6,240 $ 1,500 1,080 810 360 650 1,300 $ 2,540 $ 720 400 620 2,850 800 Total liabilities & stockholders' equity $ 6,240 $ 2,540 On December 31, 2021, Campbell obtained a loan for $650 and used the proceeds, along with the transfer of 35 shares of its $10 par value common stock, in exchange for all of Newton's common stock. At the time of the transaction, Campbell's common stock had a fair value of $40 per share. In connection with the business combination, Campbell paid $25 to a broker for arranging the transaction and $30 in stock issuance costs. At the time of the transaction, Newton's equipment was actually worth $1,450 but its buildings were only valued at $590. What total amount of additional paid-in capital will Campbell recognize from this acquisition? $1,400. $1,020. $1,105. $1,080. $1,050.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Sales and Other Dispositions of Assets
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 Accounting Intro Concepts Meth/Uses
Financial Accounting Intro Concepts Meth/Uses
Finance
ISBN:
9781285595047
Author:
Weil
Publisher:
Cengage
Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Financial & Managerial Accounting
Financial & Managerial Accounting
Accounting
ISBN:
9781285866307
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
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
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS