Samantha’s Sporting Goods had net assets consisting of the following:
Pedic Incorporated purchased Samantha’s Sporting Goods, and immediately dissolved
Samantha’s as a separate legal entity.
Requirement 1: If Samantha’s was purchased for $1,000,000 cash, prepare the entry
recorded by Pedic.
Requirement 2: If Samantha’s was purchased for $1,500,000 cash, prepare the entry
recorded by Pedic.
The balance sheets of Palisade Company and Salisbury Corporation were as follows on
December 31, 2013:
On January 1, 2014 Palisade issued 30,000 of its shares with a market value of $40 per
share in exchange for all of Salisbury’s shares, and Salisbury was dissolved. Palisade
paid $20,000 to register and issue the new common shares. It cost Palisade $50,000 in
direct combination costs. Book values equal market values except that Salisbury’s land
is worth $250,000.
Required:
Prepare a Palisade balance sheet after the business combination on January 1, 2014.
The balance sheet of the partnership of Jim, Kim, and Larry is shown below as of
September 1, 2014. The partners had decided to dissolve the partnership earlier in the
year, and all assets were converted into cash and all partnership liabilities were paid.
The remains of the partnership (with partner residual profit and loss sharing
percentages) was as follows:
The value of partners’ personal assets and liabilities on July 1, 2014 were as follows:
Required:
Prepare the final statement of partnership liquidation.
Eve, Fig, Gus, and Hal are partners who share profits and losses 50%, 25%, 15%, and
10%, respectively. The partnership will be liquidated gradually over several months
beginning January 1, 2014. The partnership trial balance at December 31, 2013 is as
follows:
Required:
Prepare a cash distribution plan for January 1, 2014, showing how cash installments
will be distributed among the partners as it becomes available. Prepare vulnerability
rankings for the partners and a schedule of assumed loss absorption.
On January 2, 2013 Carolina Clothing issued 100,000 new shares of its $5 par value
common stock valued at $19 a share for all of Dakota Dressing Company’s outstanding
common shares in an acquisition. Carolina paid $15,000 for registering and issuing
securities and $10,000 for other direct costs of the business combination. The fair value
and book value of Dakota’s identifiable assets and liabilities were the same. Assume
Dakota Company is dissolved on the date of the acquisition. Summarized balance sheet
information for both companies just before the acquisition on January 2, 2013 is as
follows:
Required:
Prepare a balance sheet for Carolina Clothing immediately after the business
combination.