Assets Liabilities and Equity $ 300,000 200,000 Current liabilities .. Bonds payable Common stock ($5 par). Accounts receivable $ 250,000 Inventory Property, plant, and equipment (net) . . 200,000 200,000 500,000 Paid-in capital in excess of par Retained earnings . . 300,000 ... Computer software 125,000 175,000 Total assets. $1,125,000 Total liabilities and equity $1,125,000
Libra Company is purchasing 100% of the outstanding stock of Genall Company for $700,000. Genall has the following balance sheet on the date of acquisition: (see attachment)
Appraisals indicate that the following fair values for the assets and liabilities should be acknowledged:
Accounts receivable . . . . . . . . . . . . . . . $300,000
Inventory . . . . . . . . . . . . . . . . . . . . . . . . 215,000
Property, plant, and equipment . . . . . . . 700,000
Computer software . . . . . . . . . . . . . . . . 130,000
Current liabilities . . . . . . . . . . . . . . . . . . 250,000
Bonds payable . . . . . . . . . . . . . . . . . . . 210,000
1. Prepare the value analysis schedule and the determination and distribution of excess schedule.
2. Prepare the elimination entries that would be made on a consolidated worksheet prepared on the date of purchase.
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