Reference no: EM132508752

On July 1, 2014, Minute Corporation issued 23,000 shares of its own $2 par value common stock for 40,000 shares of the outstanding stock of Seconds Inc. in an acquisition. Minute's common stock at July 1, 2014 was selling at $16 per share.

Just before the business combination, balance sheet information of the two corporations was as follows:

                                                                             Minute             Seconds                Seconds

                                                            Book                         Book                     Fair

                                                                Value                    Value                Value

Cash                                                               $25,000           $17,000          $17,000

Inventories                                                     55,000                 42,000           47,000

Other current assets                                      110,000                   40,000             30,000

Land                                                          100,000                       45,000            35,000

Plant and equipment-net                                     660,000               220,000            280,000

                                                                        $950,000                 $364,000         $409,000

Liabilities                                                         $220,000                  $70,000              $75,000

Capital stock, $2 par value                                 500,000                  100,000

Additional paid-in capital                                       170,000                  90,000

Retained earnings                                                     60,000                104,000

                                                                             $950,000              $364,000

Required:

Question 1: Prepare the journal entry on Minute Corporation's books to account for the investment in Seconds Inc and the consolidated balance sheet for Minute Corporation and Subsidiary immediately after the business combination.