Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity. the number of shares did P issue to acquire Stork’s assets and liabilities.

Question

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Answer 1

Question

Chapter 1, Problem 1.38P

a.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the number of shares did P issue to acquire Stork’s assets and liabilities.

a.

Expert Solution

Answer to Problem 1.38P

The number of shares issued is 5,200 .

Explanation of Solution

Computation of a number of shares issued:

=Common Stock of combined entity - Common stock of Plend Corp.Par value of shares=126,000−110,0005=5,200

b.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the total market value of the shares issued by P.

b.

Expert Solution

Answer to Problem 1.38P

The total market value of the shares issued by P is $208,000 .

Explanation of Solution

Computation of the total market value of the shares issued:

=(Common stock of combined+ Addt. paid in capital)−(Common Stock of P +Addt. paid in capital of P)=($126,000+$247,000)−($100,000+$65,000)=$208,000

c.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the fair value of inventory held by S at the date of combination.

c.

Expert Solution

Answer to Problem 1.38P

The fair value of inventory held by Stork at the date of combination is $46,000 .

Explanation of Solution

Computation of fair value of inventory held:

=Inventory value of combined-Inventory value of P=$96,000-$50,000=$46,000

d.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the fair value of identifiable net assets held by Stork at the date of combination.

d.

Expert Solution

Answer to Problem 1.38P

The fair value of identifiable net assets held by Stork at the date of combination is $130,000

Explanation of Solution

Computation of the fair value of identifiable net assets held:

	Particulars	Amount
	Cash	50,000
	Accounts Receivable	88,000
	Inventory	96,000
	Building and Equipment (Net)	430,000
	Accounts Payable	(46,000)
	Bonds Payable	(220,000)
	Bonds Premium	(6,000)
	Net Assets of Combined Entity	392,000

	Cash	40,000
	Accounts Receivable	60,000
	Inventory	50,000
	Building and Equipment (Net)	300,000
	Accounts Payable	(32,000)
	Bonds Payable	(150,000)
	Bonds Premium	(6,000)
	Net Assets of P Inc.	262,000

	Net Assets of S Company	130,000

e.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities to combine to form a new entity.

the amount of goodwill, if any, will be reported by the combined entity report immediately following the combination.

e.

Expert Solution

Answer to Problem 1.38P

The amount of goodwill is $78,000

Explanation of Solution

Computation of fair value of identifiable net assets held:

Total Market Value of shares of P Inc. LessNet Assets of S Company

208,000−130,000=78,000

f.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities to combine to form a new entity.

the balance in retained earnings that the combined entity would report immediately following the combination.

f.

Expert Solution

Answer to Problem 1.38P

The balance in retained earnings to be reported is $97,000

Explanation of Solution

The number is reported in its financial statement by P Inc. of $97,000 .

g.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the amount of depreciation expense that will be reported on those assets in 20X2 if the average life of the assets held by S Company has an average life of 10 years.

g.

Expert Solution

Answer to Problem 1.38P

The balance in retained earnings to be reported is $13,000

Explanation of Solution

Computation of depreciation amount:

Depreciation=Building and equipment( net)of combined entity-Building and equipment of P Inc.Life=430,000−300,00010=13,000

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Students have asked these similar questions

On January 1, 20X2, Plend Corporation acquired all of Stork Corporation's assets and liabilities by issuing shares of its common stock. Partial balance sheet data for the companies prior to the business combination and immediately following the combination are as follows: Plend Corporation Stork Corporation Combined Entity Book Value Book Value Assets Cash $ 52,000 $ 22,000 $ 74,000 Accounts Receivable 72,000 42,000 112,000 Inventory 62,000 47,000 120,000 Buildings and Equipment (net) 312,000 122,000 454,000 Goodwill ? Total Assets $ 498,000 $ 233,000 $ ? Liabilities and Equities Accounts Payable $ 44,000 $ 26,000 $ 70,000 Bonds Payable 162,000 82,000 244,000 Bond Premium 6,000 6,000 Common Stock, $5 par 112,000 52,000 139,500 Additional Paid-In Capital 77,000 40,000 335,500 Retained Earnings 97,000 33,000 ? Total Liabilities and Equities $ 498,000 $ 233,000 $ ? Required: What number of shares did Plend issue to acquire…

On January 1, 20X2, Plend Corporation acquired all of Stork Corporation's assets and liabilities by issuing shares of its common stock. Partial balance sheet data for the companies prior to the business combination and immediately following the combination are as follows: Plend Corporation Stork Corporation Combined Entity Book Value Book Value Assets Cash $ 52,000 $ 22,000 $ 74,000 Accounts Receivable 72,000 42,000 112,000 Inventory 62,000 47,000 120,000 Buildings and Equipment (net) 312,000 122,000 454,000 Goodwill ? Total Assets $ 498,000 $ 233,000 $ ? Liabilities and Equities Accounts Payable $ 44,000 $ 26,000 $ 70,000 Bonds Payable 162,000 82,000 244,000 Bond Premium 6,000 6,000 Common Stock, $5 par 112,000 52,000 139,500 Additional Paid-In Capital 77,000 40,000 335,500 Retained Earnings 97,000 33,000 ? Total Liabilities and Equities $ 498,000 $ 233,000 $ ? 1.What was the total market value of the shares issued by…

On January 1, Parent Company acquired 90% of Subsidiary Company in exchange for 5,400 shares of P10 par common stock having a market value of P120,600. Parent and Subsidiary condensed balance sheet on January 1, were as follows: REQUIREMENTS: USING THE ADDITIONAL INFORMATION WHAT IS THE AMOUNT OF THE: a. The investment balance on December 31 b. Dividend Income for the year c. Non-controlling interest in net income on December 31

Answer 2

Question

Chapter 1, Problem 1.38P

a.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the number of shares did P issue to acquire Stork’s assets and liabilities.

a.

Expert Solution

Answer to Problem 1.38P

The number of shares issued is 5,200 .

Explanation of Solution

Computation of a number of shares issued:

=Common Stock of combined entity - Common stock of Plend Corp.Par value of shares=126,000−110,0005=5,200

b.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the total market value of the shares issued by P.

b.

Expert Solution

Answer to Problem 1.38P

The total market value of the shares issued by P is $208,000 .

Explanation of Solution

Computation of the total market value of the shares issued:

=(Common stock of combined+ Addt. paid in capital)−(Common Stock of P +Addt. paid in capital of P)=($126,000+$247,000)−($100,000+$65,000)=$208,000

c.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the fair value of inventory held by S at the date of combination.

c.

Expert Solution

Answer to Problem 1.38P

The fair value of inventory held by Stork at the date of combination is $46,000 .

Explanation of Solution

Computation of fair value of inventory held:

=Inventory value of combined-Inventory value of P=$96,000-$50,000=$46,000

d.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the fair value of identifiable net assets held by Stork at the date of combination.

d.

Expert Solution

Answer to Problem 1.38P

The fair value of identifiable net assets held by Stork at the date of combination is $130,000

Explanation of Solution

Computation of the fair value of identifiable net assets held:

	Particulars	Amount
	Cash	50,000
	Accounts Receivable	88,000
	Inventory	96,000
	Building and Equipment (Net)	430,000
	Accounts Payable	(46,000)
	Bonds Payable	(220,000)
	Bonds Premium	(6,000)
	Net Assets of Combined Entity	392,000

	Cash	40,000
	Accounts Receivable	60,000
	Inventory	50,000
	Building and Equipment (Net)	300,000
	Accounts Payable	(32,000)
	Bonds Payable	(150,000)
	Bonds Premium	(6,000)
	Net Assets of P Inc.	262,000

	Net Assets of S Company	130,000

e.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities to combine to form a new entity.

the amount of goodwill, if any, will be reported by the combined entity report immediately following the combination.

e.

Expert Solution

Answer to Problem 1.38P

The amount of goodwill is $78,000

Explanation of Solution

Computation of fair value of identifiable net assets held:

Total Market Value of shares of P Inc. LessNet Assets of S Company

208,000−130,000=78,000

f.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities to combine to form a new entity.

the balance in retained earnings that the combined entity would report immediately following the combination.

f.

Expert Solution

Answer to Problem 1.38P

The balance in retained earnings to be reported is $97,000

Explanation of Solution

The number is reported in its financial statement by P Inc. of $97,000 .

g.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the amount of depreciation expense that will be reported on those assets in 20X2 if the average life of the assets held by S Company has an average life of 10 years.

g.

Expert Solution

Answer to Problem 1.38P

The balance in retained earnings to be reported is $13,000

Explanation of Solution

Computation of depreciation amount:

Depreciation=Building and equipment( net)of combined entity-Building and equipment of P Inc.Life=430,000−300,00010=13,000

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Answer 3

Question

Chapter 1, Problem 1.38P

a.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the number of shares did P issue to acquire Stork’s assets and liabilities.

a.

Expert Solution

Answer to Problem 1.38P

The number of shares issued is 5,200 .

Explanation of Solution

Computation of a number of shares issued:

=Common Stock of combined entity - Common stock of Plend Corp.Par value of shares=126,000−110,0005=5,200

b.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the total market value of the shares issued by P.

b.

Expert Solution

Answer to Problem 1.38P

The total market value of the shares issued by P is $208,000 .

Explanation of Solution

Computation of the total market value of the shares issued:

=(Common stock of combined+ Addt. paid in capital)−(Common Stock of P +Addt. paid in capital of P)=($126,000+$247,000)−($100,000+$65,000)=$208,000

c.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the fair value of inventory held by S at the date of combination.

c.

Expert Solution

Answer to Problem 1.38P

The fair value of inventory held by Stork at the date of combination is $46,000 .

Explanation of Solution

Computation of fair value of inventory held:

=Inventory value of combined-Inventory value of P=$96,000-$50,000=$46,000

d.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the fair value of identifiable net assets held by Stork at the date of combination.

d.

Expert Solution

Answer to Problem 1.38P

The fair value of identifiable net assets held by Stork at the date of combination is $130,000

Explanation of Solution

Computation of the fair value of identifiable net assets held:

	Particulars	Amount
	Cash	50,000
	Accounts Receivable	88,000
	Inventory	96,000
	Building and Equipment (Net)	430,000
	Accounts Payable	(46,000)
	Bonds Payable	(220,000)
	Bonds Premium	(6,000)
	Net Assets of Combined Entity	392,000

	Cash	40,000
	Accounts Receivable	60,000
	Inventory	50,000
	Building and Equipment (Net)	300,000
	Accounts Payable	(32,000)
	Bonds Payable	(150,000)
	Bonds Premium	(6,000)
	Net Assets of P Inc.	262,000

	Net Assets of S Company	130,000

e.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities to combine to form a new entity.

the amount of goodwill, if any, will be reported by the combined entity report immediately following the combination.

e.

Expert Solution

Answer to Problem 1.38P

The amount of goodwill is $78,000

Explanation of Solution

Computation of fair value of identifiable net assets held:

Total Market Value of shares of P Inc. LessNet Assets of S Company

208,000−130,000=78,000

f.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities to combine to form a new entity.

the balance in retained earnings that the combined entity would report immediately following the combination.

f.

Expert Solution

Answer to Problem 1.38P

The balance in retained earnings to be reported is $97,000

Explanation of Solution

The number is reported in its financial statement by P Inc. of $97,000 .

g.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the amount of depreciation expense that will be reported on those assets in 20X2 if the average life of the assets held by S Company has an average life of 10 years.

g.

Expert Solution

Answer to Problem 1.38P

The balance in retained earnings to be reported is $13,000

Explanation of Solution

Computation of depreciation amount:

Depreciation=Building and equipment( net)of combined entity-Building and equipment of P Inc.Life=430,000−300,00010=13,000

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Answer 4

Question

Chapter 1, Problem 1.38P

a.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the number of shares did P issue to acquire Stork’s assets and liabilities.

a.

Expert Solution

Answer to Problem 1.38P

The number of shares issued is 5,200 .

Explanation of Solution

Computation of a number of shares issued:

=Common Stock of combined entity - Common stock of Plend Corp.Par value of shares=126,000−110,0005=5,200

b.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the total market value of the shares issued by P.

b.

Expert Solution

Answer to Problem 1.38P

The total market value of the shares issued by P is $208,000 .

Explanation of Solution

Computation of the total market value of the shares issued:

=(Common stock of combined+ Addt. paid in capital)−(Common Stock of P +Addt. paid in capital of P)=($126,000+$247,000)−($100,000+$65,000)=$208,000

c.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the fair value of inventory held by S at the date of combination.

c.

Expert Solution

Answer to Problem 1.38P

The fair value of inventory held by Stork at the date of combination is $46,000 .

Explanation of Solution

Computation of fair value of inventory held:

=Inventory value of combined-Inventory value of P=$96,000-$50,000=$46,000

d.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the fair value of identifiable net assets held by Stork at the date of combination.

d.

Expert Solution

Answer to Problem 1.38P

The fair value of identifiable net assets held by Stork at the date of combination is $130,000

Explanation of Solution

Computation of the fair value of identifiable net assets held:

	Particulars	Amount
	Cash	50,000
	Accounts Receivable	88,000
	Inventory	96,000
	Building and Equipment (Net)	430,000
	Accounts Payable	(46,000)
	Bonds Payable	(220,000)
	Bonds Premium	(6,000)
	Net Assets of Combined Entity	392,000

	Cash	40,000
	Accounts Receivable	60,000
	Inventory	50,000
	Building and Equipment (Net)	300,000
	Accounts Payable	(32,000)
	Bonds Payable	(150,000)
	Bonds Premium	(6,000)
	Net Assets of P Inc.	262,000

	Net Assets of S Company	130,000

e.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities to combine to form a new entity.

the amount of goodwill, if any, will be reported by the combined entity report immediately following the combination.

e.

Expert Solution

Answer to Problem 1.38P

The amount of goodwill is $78,000

Explanation of Solution

Computation of fair value of identifiable net assets held:

Total Market Value of shares of P Inc. LessNet Assets of S Company

208,000−130,000=78,000

f.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities to combine to form a new entity.

the balance in retained earnings that the combined entity would report immediately following the combination.

f.

Expert Solution

Answer to Problem 1.38P

The balance in retained earnings to be reported is $97,000

Explanation of Solution

The number is reported in its financial statement by P Inc. of $97,000 .

g.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the amount of depreciation expense that will be reported on those assets in 20X2 if the average life of the assets held by S Company has an average life of 10 years.

g.

Expert Solution

Answer to Problem 1.38P

The balance in retained earnings to be reported is $13,000

Explanation of Solution

Computation of depreciation amount:

Depreciation=Building and equipment( net)of combined entity-Building and equipment of P Inc.Life=430,000−300,00010=13,000

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Answer 5

Chapter 1, Problem 1.38P

a.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the number of shares did P issue to acquire Stork’s assets and liabilities.

a.

Expert Solution

Answer to Problem 1.38P

The number of shares issued is 5,200 .

Explanation of Solution

Computation of a number of shares issued:

=Common Stock of combined entity - Common stock of Plend Corp.Par value of shares=126,000−110,0005=5,200

b.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the total market value of the shares issued by P.

b.

Expert Solution

Answer to Problem 1.38P

The total market value of the shares issued by P is $208,000 .

Explanation of Solution

Computation of the total market value of the shares issued:

=(Common stock of combined+ Addt. paid in capital)−(Common Stock of P +Addt. paid in capital of P)=($126,000+$247,000)−($100,000+$65,000)=$208,000

c.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the fair value of inventory held by S at the date of combination.

c.

Expert Solution

Answer to Problem 1.38P

The fair value of inventory held by Stork at the date of combination is $46,000 .

Explanation of Solution

Computation of fair value of inventory held:

=Inventory value of combined-Inventory value of P=$96,000-$50,000=$46,000

d.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the fair value of identifiable net assets held by Stork at the date of combination.

d.

Expert Solution

Answer to Problem 1.38P

The fair value of identifiable net assets held by Stork at the date of combination is $130,000

Explanation of Solution

Computation of the fair value of identifiable net assets held:

	Particulars	Amount
	Cash	50,000
	Accounts Receivable	88,000
	Inventory	96,000
	Building and Equipment (Net)	430,000
	Accounts Payable	(46,000)
	Bonds Payable	(220,000)
	Bonds Premium	(6,000)
	Net Assets of Combined Entity	392,000

	Cash	40,000
	Accounts Receivable	60,000
	Inventory	50,000
	Building and Equipment (Net)	300,000
	Accounts Payable	(32,000)
	Bonds Payable	(150,000)
	Bonds Premium	(6,000)
	Net Assets of P Inc.	262,000

	Net Assets of S Company	130,000

e.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities to combine to form a new entity.

the amount of goodwill, if any, will be reported by the combined entity report immediately following the combination.

e.

Expert Solution

Answer to Problem 1.38P

The amount of goodwill is $78,000

Explanation of Solution

Computation of fair value of identifiable net assets held:

Total Market Value of shares of P Inc. LessNet Assets of S Company

208,000−130,000=78,000

f.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities to combine to form a new entity.

the balance in retained earnings that the combined entity would report immediately following the combination.

f.

Expert Solution

Answer to Problem 1.38P

The balance in retained earnings to be reported is $97,000

Explanation of Solution

The number is reported in its financial statement by P Inc. of $97,000 .

g.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the amount of depreciation expense that will be reported on those assets in 20X2 if the average life of the assets held by S Company has an average life of 10 years.

g.

Expert Solution

Answer to Problem 1.38P

The balance in retained earnings to be reported is $13,000

Explanation of Solution

Computation of depreciation amount:

Depreciation=Building and equipment( net)of combined entity-Building and equipment of P Inc.Life=430,000−300,00010=13,000

Answer 6

Chapter 1, Problem 1.38P

a.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the number of shares did P issue to acquire Stork’s assets and liabilities.

a.

Expert Solution

Answer to Problem 1.38P

The number of shares issued is 5,200 .

Explanation of Solution

Computation of a number of shares issued:

=Common Stock of combined entity - Common stock of Plend Corp.Par value of shares=126,000−110,0005=5,200

Answer 7

Chapter 1, Problem 1.38P

a.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the number of shares did P issue to acquire Stork’s assets and liabilities.

Answer 8

a.

Expert Solution

Answer to Problem 1.38P

The number of shares issued is 5,200 .

Answer 9

a.

Expert Solution

Answer 10

a.

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Computation of a number of shares issued:

=Common Stock of combined entity - Common stock of Plend Corp.Par value of shares=126,000−110,0005=5,200

Answer 13

b.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the total market value of the shares issued by P.

b.

Expert Solution

Answer to Problem 1.38P

The total market value of the shares issued by P is $208,000 .

Explanation of Solution

Computation of the total market value of the shares issued:

=(Common stock of combined+ Addt. paid in capital)−(Common Stock of P +Addt. paid in capital of P)=($126,000+$247,000)−($100,000+$65,000)=$208,000

Answer 14

b.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the total market value of the shares issued by P.

Answer 15

b.

Expert Solution

Answer to Problem 1.38P

The total market value of the shares issued by P is $208,000 .

Answer 16

b.

Expert Solution

Answer 17

b.

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

Computation of the total market value of the shares issued:

=(Common stock of combined+ Addt. paid in capital)−(Common Stock of P +Addt. paid in capital of P)=($126,000+$247,000)−($100,000+$65,000)=$208,000

Answer 20

c.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the fair value of inventory held by S at the date of combination.

c.

Expert Solution

Answer to Problem 1.38P

The fair value of inventory held by Stork at the date of combination is $46,000 .

Explanation of Solution

Computation of fair value of inventory held:

=Inventory value of combined-Inventory value of P=$96,000-$50,000=$46,000

Answer 21

c.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the fair value of inventory held by S at the date of combination.

Answer 22

c.

Expert Solution

Answer to Problem 1.38P

The fair value of inventory held by Stork at the date of combination is $46,000 .

Answer 23

c.

Expert Solution

Answer 24

c.

Expert Solution

Answer 25

Expert Solution

Answer 26

Explanation of Solution

Computation of fair value of inventory held:

=Inventory value of combined-Inventory value of P=$96,000-$50,000=$46,000

Answer 27

d.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the fair value of identifiable net assets held by Stork at the date of combination.

d.

Expert Solution

Answer to Problem 1.38P

The fair value of identifiable net assets held by Stork at the date of combination is $130,000

Explanation of Solution

Computation of the fair value of identifiable net assets held:

	Particulars	Amount
	Cash	50,000
	Accounts Receivable	88,000
	Inventory	96,000
	Building and Equipment (Net)	430,000
	Accounts Payable	(46,000)
	Bonds Payable	(220,000)
	Bonds Premium	(6,000)
	Net Assets of Combined Entity	392,000

	Cash	40,000
	Accounts Receivable	60,000
	Inventory	50,000
	Building and Equipment (Net)	300,000
	Accounts Payable	(32,000)
	Bonds Payable	(150,000)
	Bonds Premium	(6,000)
	Net Assets of P Inc.	262,000

	Net Assets of S Company	130,000

Answer 28

d.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the fair value of identifiable net assets held by Stork at the date of combination.

Answer 29

d.

Expert Solution

Answer to Problem 1.38P

The fair value of identifiable net assets held by Stork at the date of combination is $130,000

Answer 30

d.

Expert Solution

Answer 31

d.

Expert Solution

Answer 32

Expert Solution

Answer 33

Explanation of Solution

Computation of the fair value of identifiable net assets held:

	Particulars	Amount
	Cash	50,000
	Accounts Receivable	88,000
	Inventory	96,000
	Building and Equipment (Net)	430,000
	Accounts Payable	(46,000)
	Bonds Payable	(220,000)
	Bonds Premium	(6,000)
	Net Assets of Combined Entity	392,000

	Cash	40,000
	Accounts Receivable	60,000
	Inventory	50,000
	Building and Equipment (Net)	300,000
	Accounts Payable	(32,000)
	Bonds Payable	(150,000)
	Bonds Premium	(6,000)
	Net Assets of P Inc.	262,000

	Net Assets of S Company	130,000

Answer 34

e.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities to combine to form a new entity.

the amount of goodwill, if any, will be reported by the combined entity report immediately following the combination.

e.

Expert Solution

Answer to Problem 1.38P

The amount of goodwill is $78,000

Explanation of Solution

Computation of fair value of identifiable net assets held:

Total Market Value of shares of P Inc. LessNet Assets of S Company

208,000−130,000=78,000

Answer 35

e.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities to combine to form a new entity.

the amount of goodwill, if any, will be reported by the combined entity report immediately following the combination.

Answer 36

e.

Expert Solution

Answer to Problem 1.38P

The amount of goodwill is $78,000

Answer 37

e.

Expert Solution

Answer 38

e.

Expert Solution

Answer 39

Expert Solution

Answer 40

Explanation of Solution

Computation of fair value of identifiable net assets held:

Total Market Value of shares of P Inc. LessNet Assets of S Company

208,000−130,000=78,000

Answer 41

f.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities to combine to form a new entity.

the balance in retained earnings that the combined entity would report immediately following the combination.

f.

Expert Solution

Answer to Problem 1.38P

The balance in retained earnings to be reported is $97,000

Explanation of Solution

The number is reported in its financial statement by P Inc. of $97,000 .

Answer 42

f.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities to combine to form a new entity.

the balance in retained earnings that the combined entity would report immediately following the combination.

Answer 43

f.

Expert Solution

Answer to Problem 1.38P

The balance in retained earnings to be reported is $97,000

Answer 44

f.

Expert Solution

Answer 45

f.

Expert Solution

Answer 46

Expert Solution

Answer 47

Explanation of Solution

The number is reported in its financial statement by P Inc. of $97,000 .

Answer 48

g.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the amount of depreciation expense that will be reported on those assets in 20X2 if the average life of the assets held by S Company has an average life of 10 years.

g.

Expert Solution

Answer to Problem 1.38P

The balance in retained earnings to be reported is $13,000

Explanation of Solution

Computation of depreciation amount:

Depreciation=Building and equipment( net)of combined entity-Building and equipment of P Inc.Life=430,000−300,00010=13,000

Answer 49

g.

To determine

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the amount of depreciation expense that will be reported on those assets in 20X2 if the average life of the assets held by S Company has an average life of 10 years.

Answer 50

g.

Expert Solution

Answer to Problem 1.38P

The balance in retained earnings to be reported is $13,000

Answer 51

g.

Expert Solution

Answer 52

g.

Expert Solution

Answer 53

Expert Solution

Answer 54

Explanation of Solution

Computation of depreciation amount:

Depreciation=Building and equipment( net)of combined entity-Building and equipment of P Inc.Life=430,000−300,00010=13,000

Answer 55

Ch. 1 - What types of circumstances would encourage...Ch. 1 - How would the decision to dispose of a segment of...Ch. 1 - Prob. 1.3Q Ch. 1 - Prob. 1.4Q Ch. 1 - Prob. 1.5Q Ch. 1 - Prob. 1.6Q Ch. 1 - Prob. 1.7Q Ch. 1 - Prob. 1.8Q Ch. 1 - Prob. 1.9Q Ch. 1 - Prob. 1.10Q

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity. the number of shares did P issue to acquire Stork’s assets and liabilities.

Concept explainers

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the number of shares did P issue to acquire Stork’s assets and liabilities.

Answer to Problem 1.38P

Explanation of Solution

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the total market value of the shares issued by P.

Answer to Problem 1.38P

Explanation of Solution

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the fair value of inventory held by S at the date of combination.

Answer to Problem 1.38P

Explanation of Solution

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the fair value of identifiable net assets held by Stork at the date of combination.

Answer to Problem 1.38P

Explanation of Solution

Answer to Problem 1.38P

Explanation of Solution

Answer to Problem 1.38P

Explanation of Solution

Answer to Problem 1.38P

Explanation of Solution

Want to see more full solutions like this?

Chapter 1 Solutions

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity. the number of shares did P issue to acquire Stork’s assets and liabilities.

Concept explainers

Concept Introduction: Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity. the number of shares did P issue to acquire Stork’s assets and liabilities.

Answer to Problem 1.38P

Explanation of Solution

Concept Introduction: Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity. the total market value of the shares issued by P.

Answer to Problem 1.38P

Explanation of Solution

Concept Introduction: Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity. the fair value of inventory held by S at the date of combination.

Answer to Problem 1.38P

Explanation of Solution

Concept Introduction: Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity. the fair value of identifiable net assets held by Stork at the date of combination.

Answer to Problem 1.38P

Explanation of Solution

Answer to Problem 1.38P

Explanation of Solution

Answer to Problem 1.38P

Explanation of Solution

Answer to Problem 1.38P

Explanation of Solution

Want to see more full solutions like this?

Chapter 1 Solutions

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the number of shares did P issue to acquire Stork’s assets and liabilities.

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the total market value of the shares issued by P.

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the fair value of inventory held by S at the date of combination.

Concept Introduction:

Consolidation: Merger is a combination where two entities merge to take the benefit of synergies where and assets and liabilities of the two entities combine to form a new entity.

the fair value of identifiable net assets held by Stork at the date of combination.