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    Poe Corporation merged with Saxe Corporation on December 31, 20X3. Poe issued 200,000 shares of its $10 par value common stock, worth $18 per share, to acquire all of Saxe's common stock. Before the merger, Poe had $6.8 million in stockholders' equity comprising common stock of $3 million, additional paid-in capital of $1.3 million and retained earnings of $2.5 million. Saxe had stockholders' equity of $2.5 million comprising common stock of $1.5 million, additional paid-in capital of $150,000 and retained earnings of $850,000.

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    Poe Corporation merged with Saxe Corporation on December 31, 20X3. Poe issued 200,000 shares of its $10 par value common stock, worth $18 per share, to acquire all of Saxe's common stock. Before the merger, Poe had $6.8 million in stockholders' equity comprising common stock of $3 million, additional paid-in capital of $1.3 million and retained earnings of $2.5 million. Saxe had stockholders' equity of $2.5 million comprising common stock of $1.5 million, additional paid-in capital of $150,000 and retained earnings of $850,000.

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    Uploaded by

    Jichang Hik
    Poe Corporation merged with Saxe Corporation on December 31, 20X3. Poe issued 200,000 shares of its $10 par value common stock, worth $18 per share, to acquire all of Saxe's common stock. Before the merger, Poe had $6.8 million in stockholders' equity comprising common stock of $3 million, additional paid-in capital of $1.3 million and retained earnings of $2.5 million. Saxe had stockholders' equity of $2.5 million comprising common stock of $1.5 million, additional paid-in capital of $150,000 and retained earnings of $850,000.

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    1. On December 31, 20X3, Saxe Corporation was merged into Poe Corporation.

    In the business combination, Poe issued 200,000 shares of its $10 par
    common stock, with a market price of $18 a share, for all of Saxe’s common
    stock. The stockholders’ equity section of each company’s balance sheet
    immediately before the combination was:

    Poe Saxe Common Stock $3,000,000 $1,500,000 Additional Paid-In Capital


    1,300,000 150,000 Retained Earnings 2,500,000 850,000 $6,800,000
    $2,500,000

    ans

    (200,000* ($18-$10)) [Existing additional paid-in capital on P's books] +


    1,300,000 [Additional paid-in capital from new stock issuance] = $2,900,000
    [Additional paid in capital to be reported]

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