Assets Liabilities and Equity $ 150,000 180,000 50,000 600,000 (150,000) 40,000 $ 870,000 Cash and receivables Current liabilities . Inventory Land. . Building . Accumulated depreciation 9% Bonds payable Common stock ($5 par) . Paid-in capital in excess of par Retained earnings $120,000 300,000 100,000 200,000 150,000 Goodwill Total assets. Total liabilities and equity $870,000 ...
Caswell Company is contemplating the purchase of LaBelle Company as of January 1, 2016. LaBelle Company has provided the following current balance sheet: (see attachment)
The following information exists relative to balance sheet accounts:
a. The inventory has a fair value of $200,000.
b. The land is appraised at $100,000 and the building at $600,000.
c. The 9% bonds payable have five years to maturity and pay annual interest each December 31. The current interest rate for similar bonds is 8% per year.
d. It is likely that there will be a payment for
2011 $120,000
2012 140,000
2013 150,000
2014 200,000 (includes $40,000 extraordinary gain)
2015 180,000
1. Provide an estimate of fair
2. Using the values derived in part (1), record the acquisition on the Caswell books.
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