Problem 1: Books of Acquirer
Problem 1: Books of Acquirer
Problem 1: Books of Acquirer
1. STATUTORY MERGER
Consideration transferred:
Common stock ( 100k shares x
800,000
P8 market value)
Expected par value of Stock
200,000
Price Contingency
Consideration transferred 1,000,000
Less: Fair value of assets acquired
and liabilities assumed:
Current assets 350,000
Plant assets 810,000
Liabilities (450,000) 710,000
Positive excess - Goodwill 290,000
Books of Acquirer
Journal entries of Pops, Inc. to record the acquisition.
Current Asset 350,000
Plant assets 810,000
Goodwill 290,000
Liabilities 450,000
Common stock P1 par value x 100,000
100k shares
Additional paid-in capital (P8 – 700,000
P1 par value) x 100k shares
Additional paid-in capital - Stock 200,000
Contingent Consideration