Question :
Given are pre-acquisition 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 $ 538,750 $ 88,750 $ 88,750
Receivables 294,000 302,000 302,000
Inventory 412,500 257,000 314,500
Land 620,000 215,000 185,200
Buildings and equipment (net) 807,500 339,000 406,100
Franchise agreements 224,000 194,000 227,300
Accounts payable (383,000 ) (219,000 ) (219,000 )
Accrued expenses (155,000 ) (33,750 ) (33,750 )
Long-term liabilities (1,065,000 ) (552,500 ) (552,500 )
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 (510,000 ) (265,000 )
Revenues (1,048,750 ) (347,500 )
Expenses 995,000 322,000
--------------------------------------------------------------------------------
Note: Parentheses indicate a credit balance.
On December 31, Padre acquires Sol's outstanding stock by paying $155,000 in cash and issuing 16,500 shares of its own common stock with a fair value of $40 per share. Padre paid legal and accounting fees of $26,500 as well as $11,900 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 $