Balance Sheet for Petrello Company Assignment | Top Universities
Prepare a balance sheet for Petrello Company immediately after the merger. SE 2-3 Asset Purchase, Cash, and Stock L06 Pretzel Company acquired the assets (except for cash) and assumed the liabilities of Salt Company on January 2, 2012. As compensation, Pretzel Company gave 30,000 shares of its common stock, 15,000 shares of its 10% preferred stock, and cash of $50,000 to the stockholders of Sale! Company. On the acquisition date, Pretzel Company stock had the following characteristics PRETZEL COMPANY Stock Par Value Fair Value Common $ 10 $ 25 Preferred Ibo 200 Immediately prior to the acquisition, Salt Company's balance sheet reported the following book values and fair values:
SALT COMPANY Balance Sheet January 2, 2012, Book sale Fairsalue $ 165,000 $ 165,000 Accounts receivable (net of $11,000 allowance) 220,000 198,000 Inventory–LIFO cost 275,000 390,000 Land 996,000 550,000 Buildings and equipment (net) 1.144.000 1.144.000 Total assets $2,200,000 $2,387.000 Current liabilities $ 275,000 $275,000 Bonds Payable, 10% 460,000 495,000 Common stock, $5 par value 779.000 Other contributed capital 996,000 309,000 Retained earnings $1,200,000 Total liabilities and stockholders' equity Required: Prepare the journal entry on the books of Pretzel Company to record the acquisition of the assets and assumption of the habilities of Salt Company. Get Accounting Homework Help Today.