To acquire these shares marshall issued 200000 in long-term

Assignment Help Accounting Basics

Reference no: EM13570892

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 Company Book Value		Tucker Company Book Value
Cash	$	60,000	$	20,000
Receivables		270,000		90,000
Inventory		360,000		140,000
Land		200,000		180,000
Buildings (net)		420,000		220,000
Equipment (net)		160,000		50,000
Accounts payable		(150,000)		(40,000)
Long-term liabilities		(430,000)		(200,000)
Common stock-$1 par value		(110,000)
Common stock-$20 par value				(120,000)
Additional paid-in capital		(360,000)		0
Retained earnings, 1/1/15		(420,000)		(340,000)

Note: Parentheses indicate a credit balance.

In Marshall's appraisal of Tucker, it deemed three accounts to be undervalued on the subsidiary's books: Inventory by $5,000, Land by $20,000, and Buildings by $30,000. Marshall plans to maintain Tucker's separate legal identity and to operate Tucker as a wholly owned subsidiary.

a.	Determine the amounts that Marshall Company would report in its postacquisition balance sheet. In preparing the postacquisition balance sheet, any required adjustments to income accounts from the acquisition should be closed to Marshall's retained earnings.

b.	Prepare a worksheet to consolidate the balance sheets of these two companies as of January 1, 2015.(For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.)

Reference no: EM13570892

Questions Cloud

Allocate the service department costs using the reciprocal : university printers has two service departments maintenance and personnel and two operating departments printing and

Do you write a recommendation letter for someone who is : do you write a recommendation letter for someone who is applying to grad

An insurance firm agrees to pay you 3310 at the end of 20 : an insurance firm agrees to pay you 3310 at the end of 20 years if you pay premiums of 100 per year at the end of

Describe a situation you experienced personally or became : question 1 describe an experience when you encountered a negative group member and which negative roles was

To acquire these shares marshall issued 200000 in long-term : on january 1 2015 marshall company acquired 100 percent of the outstanding common stock of tucker company. to acquire

Explain how the companys credibility and the you attitude : assume you are the vice president of marketing for a cosmetic firm that has stopped making products that use animal

A firm issues two bonds with identical issues prices : a firm issues two bonds with identical issues prices market-required yields and final maturity dates. one bond is a

Variable overhead rate and efficiency variances input all : budgetedactualnbspsales 8000 ingots240000 nbspnbsp240000 nbspnbspnbspnbspnbspnbspnbspvariable

Which research methoddesign would you use to test the : which research methoddesign would you use to test the following hypothesis?the four choices are surveys observation use

User Account

All Pages