Please note this is entirely one problem only so please answer the entire proble
ID: 2416197 • Letter: P
Question
Please note this is entirely one problem only so please answer the entire problem . Thank you On January 1, 2015, Marshall Company acquired 100 percent of the outstanding common stock of Tucker Company. To acquire these shares, Marshall issued $200,000 in long-term liabilities and 20,000 shares of common stock having a par value of $1 per share but a fair value of $10 per share, Marshall paid $30,000 to accountants, lawyers, and brokers for assistance in the acquisition and another $12,000 in connection with stock issuance costs Prior to these transactions, the balance sheets for the two companies were as follows Marshall Tucker Company Company Book Value Book Value Cash Receivables Inventory Land Buildings (net) Equipment (net) Accounts payable Long-term liabilities Common stock -$1 par value Common stock-$20 par value Additional paid-in capital Retained earnings, 1/1/15 S 60,000 S 20,000 270,000 90,000 360,000 140,000 200,000180,000 420,000 220,000 50,000 (150,000) (40,000) 430,000) (200,000) 160,000 (110,000) (120,000) (360,000) (420,000) (340,000) indicate a credit balanceExplanation / Answer
Balance Sheet Before effecting Aqusition Particulars Marshal company Tucker company Cash 60000 20000 receivables 270000 90000 Inventory 360000 140000 land 200000 180000 Buildings 420000 220000 Equipment 160000 50000 Total Assets 1470000 700000 Accounts Payables 150000 40000 Long Term Liabilities 430000 200000 Common Stock- $1 par Value 110000 Common Stock- $20 par Value 120000 Additional Paid in Capital 360000 Retained Earnigs- 01.01.2015 420000 340000 Total Liabilities 1470000 700000 Consideration for Equisition Long Term Liabilities 200000 Common Stock 20000 Purchase Consideration 220000 Standalone balance sheet of marshall after acquisition Particulars Marshal company Adjustment Closing Balance Sheet Cash 60000 -42000 18000 receivables 270000 270000 Inventory 360000 360000 land 200000 200000 Buildings 420000 420000 Equipment 160000 160000 Shares in Tucker company 220000 220000 Total Assets 1470000 1648000 Accounts Payables 150000 150000 Long Term Liabilities 430000 200000 630000 Common Stock- $1 par Value 110000 110000 Common Stock- $20 par Value 0 Additional Paid in Capital 360000 20000 380000 Retained Earnigs- 01.01.2015 420000 -42000 378000 Total Liabilities 1470000 1648000 Consolidation Entries Consolidated totals Particulars Marshal company Tucker company Debit Credit Cash 60000 20000 42000 38000 receivables 270000 90000 360000 Inventory 360000 140000 5000 495000 land 200000 180000 20000 360000 Buildings 420000 220000 30000 610000 Equipment 160000 50000 210000 Shares in Tucker company 220000 220000 0 Total Assets 1470000 700000 2073000 Accounts Payables 150000 40000 190000 Long Term Liabilities 430000 200000 200000 200000 630000 Common Stock- $1 par Value 110000 20000 130000 Common Stock- $20 par Value 120000 120000 0 Additional Paid in Capital 360000 360000 Capital reserve 100000 100000 Retained Earnigs- 01.01.2015 420000 340000 97000 663000 Total Liabilities 1470000 700000 637000 637000 2073000