Reference no: EM132617990
Following are preacquisition 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 $323,750 $78,250 $78,250
Receivables 222,750 346,000 346,000
Inventory 510,000 218,000 269,900
Land 622,500 214,000 189,500
Building and equipment (net) 845,000 307,000 375,000
Franchise agreements 296,000 196,000 226,300
Accounts payable (333,000) (198,000) (198,000)
Accrued expenses (141,000) (32,250) (32,250)
Longterm liabilities (1,122,500) (502,500) (502,500)
Common stock-$20 par value (660,000) (book values 12/31 1st colunm)
(Common stock-$5 par value (210,000) (book values 12/31 second colunm)
Additional paid-in capital (70,000) (90,000)
Retained earnings, 1/1 (430,000 ) (299,000)
Revenues (1,030,500) (389,500)
Expenses 967,000 362,000
Note: Parentheses indicate a credit balance.
On December 31, Padre acquires Sol's outstanding stock by paying $405,000 in cash and issuing 10,700 shares of its own common stock with a fair value of $40 per share. Padre paid legal and accounting fees of $22,900 as well as $11,600 in stock issuance costs.
Problem 1: Determine the value that would be shown in Padre's consolidated financial statements for each of the accounts listed. (Input all amounts as positive values.)