Prepare all journal entries on Pan’s books to record the acquisition.


Question Description:

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Journal entries to record an acquisition Pan Company issued 480,000 shares of $10 par common stock with a fair value of $10,200,000 for all the voting common stock of Set Company. In addition, Pan incurred the following costs: Legal fees to arrange the business combination $100,000 Cost of SEC registration, including accounting and legal fees 48,000 Cost of printing and issuing net stock certificates 12,000 Indirect costs of combining, including allocated overhead and executive salaries 80,000 Immediately before the acquisition in which Set Company was dissolved, Set’s assets and equities were as follows (in thousands): Book Value Fair Value Current assets $4,000 $4,400 Plant assets 6000 8,800 Liabilities 1,200 1,200 Common stock 8,000 Retained earnings 800 REQUIRED: Prepare all journal entries on Pan’s books to record the acquisition.

Answer

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