The Blue Reef Company purchased the net assets of the Pink Coral Company on January 1, 2016, and made the following entry to record the purchase:
Current Assets 100,000
Equipment 150,000
Land 50,000
Buildings 300,000
Goodwill 100,000
Liabilities
80,000
Common Stock, $1 Par
100,000
Paid-in Capital in Excess of Par
520,000
Required:
Make the required entry on January 1, 2018, assuming that additional shares would be issued on that date to compensate for any fall in the value of Blue Reef common stock below $16 per share. The settlement would be to cure the deficiency by issuing added shares based on their fair value on January 1, 2018 . The fair price of the shares on January 1, 2018 was $10.
Paid-in Capital in Excess of Par 60,000
Common Stock, $1 par
60,000
Deficiency: ($16 - $10) x 100,000 shares issued to acquire
$600,000
Divide by $10 fair value
÷ $10.00
Added number of shares to issue
60,000
You might also like to view...
Which of the following statements does NOT apply to qualitative data?
a. It employs member checking b. It is more textual in nature c. Its goal is to understand a phenomenon instead of quantifying the magnitude of relationships d. The analysis of such data is non-iterative e. The analysis is largely inductive
What is the best approach to achieving one's communication goals as a public relations professional?
A) integration and strategic planning B) delegation and teamwork C) writing and interpersonal skills D) positive and friendly demeanor