Complete a consolidated worksheet for untraded company

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Reference no: EM13950397

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.

Reference no: EM13950397

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