question archive At January 1, Danders Corporation pays $200,000 cash and also issue 18,000 shares of $10 par common stock with a market value $330,000 for all the outstanding common shares of Harrison Corporation

At January 1, Danders Corporation pays $200,000 cash and also issue 18,000 shares of $10 par common stock with a market value $330,000 for all the outstanding common shares of Harrison Corporation

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At January 1, Danders Corporation pays $200,000 cash and also issue 18,000 shares of $10 par common stock with a market value $330,000 for all the outstanding common shares of Harrison Corporation. In addition, Danders pays $30,000 for registering and issuing the 18,000 shares and $70,000 for the other direct costs of the business combination     Summarized balance sheet information for the companies immediately before the merger is as follows (in thousands) :  

 

 

                                          Danders        Harrison        Harrison

                                        Book Value      Book Value        Fair Value

Cash                                   $ 350,000          $40,000           $ 40,000

Inventories                            120,000            80,000            100,000

Other current assets               30,000           20,000               20,000

Plant assets-net                    260,000         180,000              280,000

Total Assets                        $,760,000      $ 320,000           $ 440,000

 

Current liabilities               $160,000          $30,000             $ 30,000

Other liabilities                      80,000           50,000                 40,000

Common stock, $ 10 par       420,000          200,000

Retained Earnings                100,000            40,000

Total Liabi & Equities        $760,000        $ 320,000

 

      Required:

     1)  Prepare Dander's general journal entry for the acquisition of Harrison, assuming that

           Harrison dissolves as a separate legal entity.        (6pts)

     2)  Prepare Dander's general journal entry for the acquisition of Harrison assuming that   

           Harrison continues as a separate legal entity  (6pts

 

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