Accounting Mergers, Consolidated Balance Sheet, Book Entries Or Elimination

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User Generated

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Wnpx_jrfyrl

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Business Finance

Description

consolidated balance sheet

Mergers & acquisitions

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Book entry or elimination

Find the instructions and questions attached below questions 1-

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ADVANCED ACCOUNTING TEST 2 2019S 1. Pacquires the assets of S and assumes its liabilities. Immediately before the purchase, S's trial balance was: accounts receivable inventory plant and equipment land $ 200 300 700 500 total assets $1,700 Liabilities common stock other contributed capital retained earnings 500 500 300 400 total liabilities and capital $1,700 All assets are fairly stated except for land, which as a fair-market value of $300. Any difference between cost and purchase price is attributable to good will. a. Prepare the journal entry on the books of P to record the purchase of assets and liabilities of S if the amount paid is $2,000. b. Same as a, but the amount paid is $1,000. 2. The balance sheets of P and S are presented below. The two companies agree to merge. To effect the merger, P is to exchange its unissued common stock for all the common stock of S in the ratio of 1 share of P for 2 shares of S. Market values of the shares are $59 for P and $25 for s. The fair values of S. assets and liabilities are equal to book value with the exception of inventory, which has a fair yalue of $260. 1 cash 400 480 200 accounts receivable 480 240 inventory 2,000 240 plant and equipment 3,840 800 P S total assets 6,800 1,480 liabilities common stock $8 par value other contributed capital retained earnings 1,200 3,440 400 1,760 320 800 100 360 total equities 6,800 1,480 Prepare the balance sheet for P. after the merger. 3. Pacquired 70% of the stock of S for $210. The balance sheets of the two companies is as follows: P S cash accounts receivable inventory plant and equipment land 800 100 200 10 20 30 140 100 100006 100 2200 2,000 200 300 | 80 total assets 3 liabilities 200 10 common stock 1,100 50 other contributed capital 60 retained earnings 600 400 total equities 2,000 2200 Any difference between cost and book value is attributed to land. Prepare any necessary eliminating entries at time of purchase in order to prepare a consolidated balance sheet. 3 200 4. Prepare the consolidated balance sheet from the information given in three. .8 5. AT the beginning of 2010, P purchased 70% of the outstanding stock of S for $560,000 On that date, S' stockholders' equity section consisted of the following: common stock other contributed capital retained earnings 300,000 400,000 70,000 On 12-31-17, S had retained earnings of $115,000. During 2018, S gave a dividend of $20,000 and reported earnings of $35,000. If P uses the COST method, give the book entries and then the eliminating entries needed on 12-31-18. Label the entries as to book or elimination. 6. Using the information given in problem five, give the book entries and then the eliminating entries needed on 12-31-18. Label the entries as to book or elimination. nswer any FIVE questions. Show all calculations. Label all work. ADVANCED ACCOUNTING TEST 2 20195 1. Pacquires the assets of S and assumes its liabilities. Immediately before the purchase, S's trial balance was: accounts receivable inventory plant and equipment land $ 200 300 700 500 total assets 2700 stro 1000 Liabilities common stock other contributed capital retained earnings Seo 800 500 300 400 total liabilities and capital $1,700 2, 700 All assets are fairly stated except for land, which as a fair-market value of $300. Any difference between cost and purchase price is attributable to good will. a. Prepare the journal entry on the books of P to record the purchase of assets and liabilities of Sif the amount paid is $3,000. b. Same as a, but the amount paid is $1,000. -4, е от 700 2. The balance sheets of P and S are presented below. The two companies agree to merge. To effect the merger, P is to exchange its unissued common stock for all the common stock of S in the ratio of 1 share of P for shares of S. Market values of the shares are $S9 for P and $25 for S. The fair values of S. assets and liabilities are equal to book value with the exception of inventory, which has a fair value of $260. 14 P S cash 480 200 accounts receivable 480 240 inventory 2,000 240 plant and equipment 3,840 800 yoo total assets 6,800 1,480 liabilities common stock $8 par value other contributed capital retained earnings 1,200 3,440 400 1,760 320 800 100 360 total equities 6,800 1,480 Prepare the balance sheet for P. after the merger.
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Tags: accounting problem Advanced accounting accounting techniques Excelsheet Help Accounting Mergers Consolidated Balance Sheet Book Entries Or Elimination