In: Accounting
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 | $ | 400,000 | $ | 120,000 | $ | 120,000 | |||||||||
Receivables | 220,000 | 300,000 | 300,000 | ||||||||||||
Inventory | 410,000 | 210,000 | 260,000 | ||||||||||||
Land | 600,000 | 130,000 | 110,000 | ||||||||||||
Building and equipment (net) | 600,000 | 270,000 | 330,000 | ||||||||||||
Franchise agreements | 220,000 | 190,000 | 220,000 | ||||||||||||
Accounts payable | (300,000) | (120,000) | (120,000) | ||||||||||||
Accrued expenses | (90,000) | (30,000) | (30,000) | ||||||||||||
Longterm liabilities | (900,000) | (510,000) | (510,000) | ||||||||||||
Common stock—$20 par value | (660,000) | ||||||||||||||
Common stock—$5 par value | (210,000) | ||||||||||||||
Additional paid–in capital | (70,000) | (90,000) | |||||||||||||
Retained earnings, 1/1 | (390,000) | (240,000) | |||||||||||||
Revenues | (960,000) | (330,000) | |||||||||||||
Expenses | 920,000 | 310,000 | |||||||||||||
Note: Parentheses indicate a credit balance.
On December 31, Padre acquires Sol’s outstanding stock by paying $360,000 in cash and issuing 10,000 shares of its own common stock with a fair value of $40 per share. Padre paid legal and accounting fees of $20,000 as well as $5,000 in stock issuance costs.
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.)