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49. On January 1, 20X1, the Moody Company entered into a transaction for
100% of the outstanding common stock of Osorio Company. To acquire these
shares, Moody issued $400 in long-term liabilities and 40 shares of common
stock having a par value of $1 per share but a fair value of $10 per share. Moody
paid $20 to lawyers, accountants, and brokers for assistance in bringing about
this acquisition. Another $15 was paid in connection with stock issuance costs.
Prior to these transactions, the balance sheets for the two companies were as
follows:
Note: Parentheses indicate a credit balance.
In Moody's appraisal of Osorio, three assets were deemed to be undervalued on
the subsidiary's books: Inventory by $10, Land by $40, and Buildings by $60.
Compute the amount of consolidated land at date of acquisition.
50. On January 1, 20X1, the Moody Company entered into a transaction for
100% of the outstanding common stock of Osorio Company. To acquire these
shares, Moody issued $400 in long-term liabilities and 40 shares of common
stock having a par value of $1 per share but a fair value of $10 per share. Moody
paid $20 to lawyers, accountants, and brokers for assistance in bringing about
this acquisition. Another $15 was paid in connection with stock issuance costs.
Prior to these transactions, the balance sheets for the two companies were as
follows:
Note: Parentheses indicate a credit balance.
In Moody's appraisal of Osorio, three assets were deemed to be undervalued on
the subsidiary's books: Inventory by $10, Land by $40, and Buildings by $60.
Compute the amount of consolidated equipment at date of acquisition.
51. On January 1, 20X1, the Moody Company entered into a transaction for
100% of the outstanding common stock of Osorio Company. To acquire these
shares, Moody issued $400 in long-term liabilities and 40 shares of common
stock having a par value of $1 per share but a fair value of $10 per share. Moody
paid $20 to lawyers, accountants, and brokers for assistance in bringing about
this acquisition. Another $15 was paid in connection with stock issuance costs.
Prior to these transactions, the balance sheets for the two companies were as
follows:
Note: Parentheses indicate a credit balance.
In Moody's appraisal of Osorio, three assets were deemed to be undervalued on
the subsidiary's books: Inventory by $10, Land by $40, and Buildings by $60.
Compute the amount of consolidated common stock at date of acquisition.
52. On January 1, 20X1, the Moody Company entered into a transaction for
100% of the outstanding common stock of Osorio Company. To acquire these
shares, Moody issued $400 in long-term liabilities and 40 shares of common
stock having a par value of $1 per share but a fair value of $10 per share. Moody
paid $20 to lawyers, accountants, and brokers for assistance in bringing about
this acquisition. Another $15 was paid in connection with stock issuance costs.
Prior to these transactions, the balance sheets for the two companies were as
follows:
Note: Parentheses indicate a credit balance.
In Moody's appraisal of Osorio, three assets were deemed to be undervalued on
the subsidiary's books: Inventory by $10, Land by $40, and Buildings by $60.
Compute the amount of consolidated additional paid-in capital at date of
acquisition.
53. On January 1, 20X1, the Moody Company entered into a transaction for
100% of the outstanding common stock of Osorio Company. To acquire these
shares, Moody issued $400 in long-term liabilities and 40 shares of common
stock having a par value of $1 per share but a fair value of $10 per share. Moody
paid $20 to lawyers, accountants, and brokers for assistance in bringing about
this acquisition. Another $15 was paid in connection with stock issuance costs.
Prior to these transactions, the balance sheets for the two companies were as
follows:
Note: Parentheses indicate a credit balance.
In Moody's appraisal of Osorio, three assets were deemed to be undervalued on
the subsidiary's books: Inventory by $10, Land by $40, and Buildings by $60.
Compute the amount of consolidated cash after recording the acquisition
transaction.
54. Carnes has the following account balances as of May 1, 2010 before an
acquisition transaction takes place.
The fair value of Carnes' Land and Buildings are $650,000 and $550,000,
respectively. On May 1, 2010, Riley Company issues 30,000 shares of its $10 par
value ($25 fair value) common stock in exchange for all of the shares of Carnes'
common stock. Riley paid $10,000 for costs to issue the new shares of stock.
Before the acquisition, Riley has $700,000 in its common stock account and
$300,000 in its additional paid-in capital account.
On May 1, 2010, what value is assigned to Riley's investment account?
55. Carnes has the following account balances as of May 1, 2010 before an
acquisition transaction takes place.
The fair value of Carnes' Land and Buildings are $650,000 and $550,000,
respectively. On May 1, 2010, Riley Company issues 30,000 shares of its $10 par
value ($25 fair value) common stock in exchange for all of the shares of Carnes'
common stock. Riley paid $10,000 for costs to issue the new shares of stock.
Before the acquisition, Riley has $700,000 in its common stock account and
$300,000 in its additional paid-in capital account.
At the date of acquisition, by how much does Riley's additional paid-in capital
increase or decrease?
56. Carnes has the following account balances as of May 1, 2010 before an
acquisition transaction takes place.
The fair value of Carnes' Land and Buildings are $650,000 and $550,000,
respectively. On May 1, 2010, Riley Company issues 30,000 shares of its $10 par
value ($25 fair value) common stock in exchange for all of the shares of Carnes'
common stock. Riley paid $10,000 for costs to issue the new shares of stock.
Before the acquisition, Riley has $700,000 in its common stock account and
$300,000 in its additional paid-in capital account.
What will be Riley's balance in its common stock account as a result of this
acquisition?
57. Carnes has the following account balances as of May 1, 2010 before an
acquisition transaction takes place.
The fair value of Carnes' Land and Buildings are $650,000 and $550,000,
respectively. On May 1, 2010, Riley Company issues 30,000 shares of its $10 par
value ($25 fair value) common stock in exchange for all of the shares of Carnes'
common stock. Riley paid $10,000 for costs to issue the new shares of stock.
Before the acquisition, Riley has $700,000 in its common stock account and
$300,000 in its additional paid-in capital account.
What will be the consolidated additional paid-in capital as a result of this
acquisition?
58. The financial balances for the Atwood Company and the Franz Company
as of December 31, 20X1, are presented below. Also included are the fair values
for Franz Company's net assets.
Note: Parenthesis indicate a credit balance
Assume an acquisition business combination took place at December 31, 20X1.
Atwood issued 50 shares of its common stock with a fair value of $35 per share
for all of the outstanding common shares of Franz. Stock issuance costs of $15
(in thousands) and direct costs of $10 (in thousands) were paid.
Compute the investment to be recorded at date of acquisition.
