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ACC - Morton Co. Problem

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Business Combination with Goodwill;Morton Co. paid cash of $ 178,000 to acquire Zink Company?s net assets on February 1, 2013. The balance sheet data for the two companies and fair value information for Zink immediately before the business combination were;Morton Corporation Zink Company;Balance Sheet Item Book Value Book Value Fair Value;Cash $ 240,000 $ 20,000 $ 20,000;Accounts Receivable 140,000 35,000 35,000;Inventory 170,000 30,000 50,000;Patents 80,000 40,000 60,000;Buildings & Equipment 380,000 310,000 150,000;Less: Accumulated Depreciation (190,000) (200,000);Total Assets $ 820,000 $235,000 $315,000;Accounts Payable $ 85,000 $ 55,000 $ 55,000;Notes Payable 150,000 120,000 120,000;Common Stock;$ 10 par value 200,000;$ 6 par value 18,000;Additional Paid-In Capital 160,000 10,000;Retained Earnings 225,000 32,000;Total Liabilities and Equities $ 820,000 $235,000;Required;a. Give the journal entry anchored by Morton Corporation when it acquired Zink?s net assets.;b. Prepare a balance sheet for Morton immediately following the acquisition.;c. Give the journal entry to be recorded by Morton if it acquires all of Zink?s common stock (instead of Zink?s net assets) for $178,000.

 

Paper#81153 | Written in 18-Jul-2015

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