Problem - Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included are fair values for Sol Company accounts.
|
Padre
Company
|
Sol Company
|
|
Book Values
|
Book Values
|
Fair Values
|
|
12/31
|
12/31
|
12/31
|
|
Cash
|
$510,750
|
$45,400
|
$45,400
|
|
Receivables
|
277,500
|
369,000
|
369,000
|
|
Inventory
|
487,500
|
243,000
|
297,800
|
|
Land
|
607,500
|
164,000
|
137,500
|
|
Buildings and equipment (net)
|
830,000
|
301,000
|
370,300
|
|
Franchise agreements
|
316,000
|
275,000
|
309,200
|
|
Accounts payable
|
(388,000)
|
(146,000)
|
(146,000)
|
|
Accrued expenses
|
(125,000)
|
(33,000)
|
(33,000)
|
|
Long-term liabilities
|
(1,102,500
|
(610,000)
|
(610,000)
|
|
Common stock-$20 par value
|
(660,000
|
|
|
|
Common stock-$5 par value
|
|
(210,000)
|
|
|
Additional paid-in capital
|
(70,000)
|
(90,000)
|
|
|
Retained earnings, 1/1
|
(630,000)
|
(280,000)
|
|
|
Revenues
|
(1,037,750)
|
(383,400)
|
|
|
Expenses
|
984,000
|
355,000
|
|
Note: Parentheses indicate a credit balance.
On December 31, Padre acquires Sol's outstanding stock by paying $140,000 in cash and issuing 17,300 shares of its own common stock with a fair value of $40 per share. Padre paid legal and accounting fees of $20,700 as well as $6,700 in stock issuance costs.
Determine the value that would be shown in Padre and Sol's consolidated financial statements for each of the accounts listed. (Input all amounts as positive values.)
|
Accounts
|
Amounts
|
|
Inventory
|
$
|
|
Land
|
$
|
|
Buildings and equipment
|
$
|
|
Franchise agreements
|
$
|
|
Goodwill
|
$
|
|
Revenues
|
$
|
|
Additional paid-in capital
|
$
|
|
Expenses
|
$
|
|
Retained earnings, 1/1
|
$
|