Acme Report Financial Statements Assignment Help With Solution

Acme Report Financial Statements Assignment Help

1.Acme Corporation (a U.S. company located in Sarasota, Florida) has the following import/export transactions in 2011:
 
March 1- Bought inventory costing 50,000 pesos on credit.
 
May 1- Sold 60 percent of the inventory for 45,000 pesos on credit.
 
August 1- Collected 40,000 pesos from customers.
 
September 1- Paid 30,000 pesos to creditors
 
Currency exchange rates for 1 peso for 2011 are as follows:
 
March 1- $0.17
 
May 1- 0.18
 
August 1- 0.19
 
September 1- 0.20
 
December 31- 0.21
 
For each of the following accounts, how much will Acme report on its 2011 financial statements?
 
a.Inventory.
 
b.Cost of Goods Sold.
 
c.Sales.
 
d.Accounts Receivable.
 
e.Accounts Payable.
 
f.Cash.
 
 
2.Anchor Corporation paid cash of $178,000 to acquire Zink Company’s net assets on February 1, 20X3. The balance sheet data for the two companies and fair value information for Zink immediately before the business combination were:
 

Anchor 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 & Equities

$ 820,000

$ 235,000

 
Required:
 
a. Give the journal entry recorded by Anchor Corporation when it acquired Zink’s net assets.
 
b. Prepare a balance sheet for Anchor immediately following the acquisition.
 
c. Give the journal entry to be recorded by Anchor if it acquires all of Zink’s common stock (instead of Zink’s net assets) for $178,000.
 
 
3.On January 1, 20X2, Frost Company acquired all of TKK Corporation’s assets and liabilities by issuing 24,000 shares of its $4 par value common stock. At that date, Frost shares were selling at $22 per share. Historical cost and fair value balance sheet data for TKK at the time of acquisition were as follows:
 

Balance Sheet Item

Historical Cost

Fair Value

Cash & Receivables

$ 28,000

$ 28,000

Inventory

94,000

122,000

Buildings & Equipment

600,000

470,000

Less: Accumulated Depreciation

(240,000)

Total Assets

$ 482,000

$620,000

Accounts Payable

$ 41,000

$ 41,000

Notes Payable

65,000

63,000

Common Stock ($10 par value)

160,000

Retained Earnings

216,000

Total Liabilities & Equities

$ 482,000

 
Frost paid legal fees for the transfer of assets and liabilities of $14,000. Frost also paid audit fees of $21,000 and listing application fees of $7,000, both related to the issuance of new shares.
 
Required:
 
Prepare the journal entries made by Frost to record the business combination.
 
 

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4.On January 1, 20X3, PURE Products Corporation issued 12,000 shares of its $10 par value stock to acquire the net assets of Light Steel Company. Underlying book value and fair value information for the balance sheet items of Light Steel at the time of acquisition follow:
 

Balance Sheet Item

Book Value

Fair Value

Cash

$ 60,000

$ 60,000

Accounts Receivable

100,000

100,000

Inventory (LIFO basis)

60,000

115,000

Land

50,000

70,000

Buildings & Equipment

400,000

350,000

Less: Accumulated Depreciation

(150,000)

Total Assets

$ 520,000

$695,000

Accounts Payable

$ 10,000

$ 10,000

Bonds Payable

200,000

180,000

Common Stock ($5 par value)

150,000

Additional Paid-In Capital

70,000

Retained Earnings

90,000

Total Liabilities & Equities

$ 520,000

 
Light Steel shares were selling at $18 and PURE Products shares were selling at $50 just before the merger announcement. Additional cash payments made by PURE Products in completing the acquisition were:
 

Finder’s fee paid to firm that located Light Steel

$10,000

Audit fee for stock issued by PURE Products

3,000

Stock registration fee for new shares of PURE Products

5,000

Legal fees paid to assist in transfer of net assets

9,000

Cost of SEC registration of PURE Products shares

1,000

 
Required:
 
Prepare all journal entries to record the business combination on PURE Products’ books.
 
 
5.The following balance sheets were prepared for Adam Corporation and Best Company on January 1, 20X2, just before they entered into a business combination:
 

Adam Corporation

Best Company

Item

Book Value

Fair Value

Book Value

Fair Value

Cash & Receivables

$150,000$150,000$ 90,000$ 90,000

Inventory

300,000380,00070,000160,000

Buildings & Equipment

600,000430,000250,000240,000

Less: Accumulated Depreciation

(250,000)(80,000)

Total Assets

$800,000$960,000$330,000$490,000

Accounts Payable

$ 75,000$ 75,000$ 50,000$ 50,000

Notes Payable

200,000215,00030,00035,000

Common Stock:

$8 par value

180,000

$6 par value

90,000

Additional Paid-In Capital

140,00055,000

Retained Earnings

205,000105,000

Total Liabilities & Equities

$800,000$330,000

 
Adam acquired all of Best Company’s assets and liabilities on January 1, 20X2, in exchange for its common shares. Adam issued 8,000 shares of stock to complete the business combination.
 
Required:
 
Prepare a balance sheet of the combined company immediately following the acquisition, assuming Adam’s shares were trading at $60 each.
 
 

Product Code :Acc-sol-23

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