Complete a consolidated worksheet for untraded company and

Reverse Acquisition On January 1, 20X2, the shareholders of Untraded Company request 6,000 Traded shares in exchange for all of their 5,000 shares. This is an exchange ratio of 1.2 to 1. The fair value of a share of Traded Company is $60. The acqui- sition occurs when the two companies have the following balance sheets:

Untraded Company (the acquirer) Balance Sheet

December 31, 20X1

Assets

 

Liabilities and Equity

 

Current assets .

$  10,000

Long-term liabilities . .

$       5,000

Building (net) . .

150,000

Common stock ($1 par), 5,000 shares . .

 

5,000

Equipment (net) . .

100,000

Paid-in capital in excess of par .

115,000

 

 

Retained earnings .

135,000

Total assets. .

$260,000

Total liabilities and equity .

$260,000

Traded Company (the acquiree) Balance Sheet

December 31, 20X1

Assets

Book Value

Fair Value

Liabilities and Equity

Book Value

Fair Value

Current assets

$ 5,000

$ 5,000

Long-term liabilities

$ 10,000

$10,000

Building (net)

100,000

200,000

Common stock ($1 par), 4,000 shares

4,000

 

Equipment (net)

20,000

40,000

Paid-in capital in excess of par

96,000

 

 

 

 

Retained earnings

15,000

 

Total assets

$125,000

$245,000

Total liabilities and equity

$125,000

 

1. Prepare an appropriate value analysis and a determination and distribution of excess schedule.

2. Complete a consolidated worksheet for Untraded Company and its subsidiary, Traded Company, as of January 1, 20X2.

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Financial Accounting: Complete a consolidated worksheet for untraded company and
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